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.

European regulators say “Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service”.

It gave the US company 90 days to stop or face fines of up to 5 per cent of the average daily worldwide turnover of parent company Alphabet.

The European Commission, which polices EU competition rules, alleges Google elevates its shopping service even when other options might have better deals.

The commission said Google “gave prominent placement in its search results only to its own comparison shopping service, whilst demoting rival services. It stifled competition on the merits in comparison shopping markets”.

Google maintains it’s just trying to package its search results in a way that makes it easier for consumers to find what they want.

“When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products,” Kent Walker, senior vice president at Google, said in a statement.

“That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.

“We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”

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.

But the penalty is likely to leave a bigger dent in Google’s pride and reputation than its finances.

Alphabet has more than $US92 billion in cash, including nearly $US56 billion in accounts outside of Europe.

Google dominance ‘huge concern’

News Corp says the multi-billion dollar fine slapped on Google by the European Commission should be just the first step in combating the company’s abuse of its online search dominance.

The EC fined Google 2.42 billion euros ($A3.5 billion) for unfairly favouring its own shopping recommendations in search results – a move welcomed by News Corp, which said the California-based tech firm’s dominance was a big concern.

The Rupert Murdoch-controlled media giant – which owns almost 60 per cent of newspapers sold in Australia – is among those concerned that the likes of Google and Facebook unfairly profit from their content.

“Other regulators and companies have been intimidated by Google’s overwhelming might, but the Commission has taken a strong stand and we hope that this is the first step in remedying Google’s shameless abuse of its dominance in search,” the company said in a statement on Wednesday.

“We strongly believe that the abuse of algorithms by dominant digital platforms should be of concern to every country and company seeking a fair, competitive and creative society.”