GoKawiilA Google logo displays on a smartphone screen and the European flag on a computer screen.
European regulators have fined Google 890 million euros ($1 billion), alleging the company gives preferential treatment to its own services.
The fine is Google's first under the European Union's sweeping Digital Markets Act (DMA) which aims to scrutinize Big Tech's operating practices in Europe.
Shares of Google-parent Alphabet were around 4% lower in premarket trading, but that primarily reflected investor unease over rising AI spending outlined in the company's earnings report on Wednesday.
The European Commission, the EU's executive arm, said it found that Google gives preferential treatment to its own services, such as shopping and hotels, over those of third parties in search.
Google displays its own services "more prominently in search results," while similar third parties "do not have the same prominence," the Commission said.
The U.S. tech giant is also in breach of so-called anti-steering measures. Under the regulation, app developers who distribute their product via Google Play should be able to inform customers of alternative, sometimes cheaper offers. Those developers should be able to direct customers to those offers even if they are on external websites outside of the Google Play Store.
The Commission said Google failed to comply with that obligation.
"In particular, Google prevents app developers from freely communicating and promoting offers and concluding contracts with users in distribution channels of their choice, including third-party app stores," the Commission said.
Kent Walker, president of global affairs at Google and Alphabet, said the DMA will ruin the product experience for users.
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