Google has been fined €890 million (A$1.6 billion) by European regulators for favouring its own services in search results and restricting app developers from directing users to cheaper offers outside the Google Play Store.

The European Commission issued two separate penalties under the Digital Markets Act, marking Google’s first major fine under the European Union’s sweeping technology competition rules.

Google was fined €460 million after regulators found it displayed its own shopping, hotel, transport and sports services more prominently in search results than competing third-party platforms.

A further €430 million penalty was imposed over Google Play rules that allegedly prevented developers from freely promoting alternative payment options, websites and third-party app stores.

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Under the DMA, developers must be allowed to inform users about potentially cheaper offers outside an app store without facing excessive fees or contractual restrictions.

“The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” European Commission executive vice-president Teresa Ribera said.

Google has been ordered to treat competing services appearing in search results in a fair and non-discriminatory manner and allow developers to communicate and complete transactions with customers outside Google Play.

The company has 60 days to comply or risk recurring penalties of up to 5% of its total worldwide turnover.

Google president of global affairs Kent Walker criticised the decision, claiming the rules would force the company to remove popular search functions, including instant pricing and availability information for hotels, flights and restaurants.

“This isn’t fair competition; it’s product degradation driven by a small group of self-serving complainants,” Walker said.

Google said it was reviewing the decision and considering an appeal.

The Commission said Google had already begun testing changes to the presentation of its search results and Play Store steering rules, describing the work as progress towards compliance.

The decision follows separate DMA penalties against Apple and Meta as the EU increases its scrutiny of the world’s largest technology platforms.