Making the announcement Wednesday, the European Commission said the firm had used the mobile operating system to illegally “cement its dominant position in general internet search”.
EU said the firm’s parent Alphabet has been given 90 days to comply with the ruling or face further penalties of up to 5% of its average daily turnover.
At a press conference in Brussels Competition Commissioner Margrethe Vestager said consumers needed choice, adding that the ruling could lead manufactures to sell smart devices using different versions of the Android operating system to Google’s, such as Amazon’s Fire OS.
“This will change the marketplace,” she said.
Though Alphabet can easily afford the fine as its cash reserves totalled nearly $103bn at the end of March, the company insists it would appeal the ruling.
Google’s chief executive Sundar Pichai was pre-briefed about the ruling on Tuesday and has blogged in response.
“Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them,” he wrote.
“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal.”
Google was previously fined €2.4bn ($2.8bn; £2.1bn) over a separate probe into its shopping comparison service – a ruling the tech firm is in the process of appealing against.
Its advert-placing business AdSense, is also under investigation by the EU