The European Commission finding is the most consequential decision made in its eight-year antitrust battle with the USA technology company.
The European Commission fine exceeds last year's then-record 2.4 billion-euro penalty following an investigation into Google's shopping-search service.
Reacting to the European Union ruling, Google's CEO Sundar Pichai in a lengthy blog post said that "the decision rejects the business model that supports Android, which has created more choice for everyone, not less".
Android is an open-source operating system that Google lets cell-phone makers use for free. "These practices have denied rivals the chance to innovate and compete on the merits".
A remedy could involve unbundling its core apps Search, Chrome and Play Store from eight other apps it packages with Android.
The commission however acknowledged that Google's version of Android does not prevent device owners downloading alternative web browsers or using other search engines.More news: The Kremlin's hackers are already sniffing, probing around America's 2018 elections
Google is already preparing the appeal, but if this goes wrong, Google will have serious problems that would bring down its revenue derived from the use of its apps and advertising.
"If they can't rely on that as a source of money, they'll have to charge for Android and all the software that Google makes", Downes said. As a result, it is the most widely used system, beating Apple's iOS by a wide margin. Trying to regulate giants such as Apple, Google, Facebook, Microsoft and Intel, which have all received antitrust fines from the European Union in the last 10 years, requires a lot of resources.
Google engineers are working on a new operating system, an operating system that can for the company replace everything else that is out there, including Chrome OS and Android.
As a result of these restrictions, the European Commission has decided, Google unfairly drove internet traffic to their own servers.
Google has rejected the EU's accusations, arguing that its approach encourages competition. Google licenses its Android software to phone-makers for free. "But we are concerned that today's decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms", Pichai said.
The Google crackdown comes at a sensitive time for trans-Atlantic relations, with President Donald Trump lambasting the European Union as a "foe" only last week.
In a recent CBS-Scotland interview, following a trip to the United Kingdom and a North Atlantic Treaty Organisation summit, Trump accused the Union of being an economic foe because of 'what they do (to the US) in trade.' This comment comes amid tensions over Trump's decision to impose tariffs on aluminum and steel from the United Kingdom; adding more fuel to an ongoing global trade war. "We will continue to do it, no matter the political context".