The European Union's competition watchdog has slapped a record 2.42 billion euro ($A3.5 billion) fine on internet giant Google for breaching antitrust rules with its online shopping service. The EU Commission described this as an "illegal advantage". "It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation".
The fine is the highest ever imposed in Europe for anti-competitive behaviour, exceeding a 1.06 billion euros penalty on Silicon Valley chip maker Intel in 2009.
For its part, Google has said that there's nothing anti-consumer about its policies, and that it intends to appeal the ruling.
"When you shop online, you want to find the products you are looking for quickly and easily".
The commission's decision "underestimates the value of those kinds of fast and easy connections", Kent Walker, Google's general counsel, wrote in a blog post.
"That is why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both".
Crucially for Google, Brussels has demanded that the USA tech giant change the business model for Google Shopping to meet the EU's concerns.
It's also been given 90 days to "end the conduct" or face ongoing fines of up to $18 million a day or roughly 5% of its daily revenue.
The commission said traffic to Google's shopping service jumped 45-fold in the United Kingdom, while some rival sites saw visitor numbers plunge 85 per cent.
The European Commission directed Google to open up its shopping search results to the tech company's competitors.
The Commission has also charged Google with using its Android mobile operating system to the disadvantage of rivals.
A White House spokesman declined to comment on the European Union case against Google, saying the administration would take no position on pending litigation.
The decision announced Tuesday by the European Commission punished Google for unfairly favoring its own online shopping recommendations in its search results.
The fine, equivalent to 3 percent of Alphabet's revenue, is the biggest regulatory setback for Google, which settled with USA enforcers in 2013 without a penalty after agreeing to change some of its search practices. The EU has two other investigations now open into Google's business practices in other services: one involving its Android operating system and another concerning its AdSense service.