The European Commission said the firm had used the mobile operating system to illegally "cement its dominant position" in search.The firm's parent Alphabet has been given 90 days to change its business practices or face further penalties of up to five percent of its average global daily turnover.
Google could easily afford the fine if required - its cash reserves totalled nearly $103 billion at the end of March, but the prospect of having to pay the EU a rolling tax before it can change its business operations is a bit harder.
At a press conference in Brussels, Competition Commissioner Margrethe Vestager said consumers needed choice.
And she suggested the ruling could lead manufacturers to sell smart devices using different versions of the Android operating system to Google's, such as Amazon's Fire OS, which she said they had been prevented from doing.
"This will change the market place", she said.
Google's chief executive Sundar Pichai said that Android had enabled rapid innovation, wide choice, and falling prices. The EU decision rejects the business model that supports Android, which has created more choice for everyone, not less.
Vestager previously fined Google €2.4 billion over a separate probe into its shopping comparison service - a ruling the tech firm is in the process of appealing. In addition, her team has a third investigation underway into Google's advert-placing business AdSense.
The Competition Commissioner said that Google carried out its abuse at a time when the mobile internet was growing quickly, helping it ensure that its advertising-supported search service repeated the success it had already found on desktop computers.
She cannot turn the clock back, but said the size of the fine had been based on the firm's search-related earnings from Android devices in Europe since 2011.
She has, however, said the firm must now stop all of the practices outlined above and refrain from any measures with a similar goal. Bizzarely she might have in mind a scheme which worked in Russia.
After similar complaints by the country's regulator, Google now offers Android users a choice between Google, Yandex and Mail.ru as the default search engine the first time they use the Chrome browser. This resulted in Yandex gaining market share on Android phones in Russia.
Fairsearch - a trade group that originally included Microsoft, Nokia and Oracle among its members.
It claims the case has dragged on for so long because Google had used "every trick in its book to delay action".
But the group welcomed the commissioner's intervention.
"This is an important step in disciplining Google's abusive behaviour in relation to Android", said spokesman Thomas Vinje.
"It means that Google should cease its anti-competitive practices regarding smartphones, but also in other areas - smart TVs in particular - where it is foreclosing competition by using the same practices."
