European Union regulators have awarded a fine over android antitrust case in favour of Google with a record of $5.06 billion for using its Android mobile operating system to squeeze out rivals, and ordered changes to its business that could loosen the company’s grip on its biggest growth engine: mobile phones.

As Android is an open-source and free operating system, device manufacturers still have to obtain a license, with certain conditions, from Google to integrate its Play Store service within their smartphones.

The European Commission levied the fine Wednesday, saying that Google has broken the law by forcing Android smartphone manufacturers to pre-install its own mobile apps and services, like Google Search, Chrome, YouTube, and Gmail, as a condition for licensing. Secondly, Google's app and services an unfair preference over other rival services, preventing rivals from innovating and competing, which is "illegal under EU antitrust rules."

Key takeaways :

* Google was ordered to pay $3.7 billion last year over its online shopping search service

* The tech company reportedly have cash reserves of almost $140 billion

* Google said it would appeal the fine.

EU Commissioner Ms. Margrethe Vestager said, Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. Ms. Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 per cent of parent Alphabet's average daily worldwide turnover.

The fine was coupled with remedies that would effectively loosen Google’s grip over its Android software, which is used in 80 percent of the world’s smartphones and is the most important case out of a trio of antitrust cases against Google. Google has used Android as a vehicle to cement the dominance of its search engine,” said Margrethe Vestager, Europe’s antitrust chief and there is a significant danger of unintended consequences that penalises the consumer.

This ranges from increased fragmentation and greater app inconsistency to increases in hardware cost should Google decide to change or adapt the Android business model.

Google said, it would appeal the decision, and the case is likely to drag on for years. However, the company must deposit the fine in a holding account while the legal process unfolds. If Google ultimately loses an appeal, the money will be distributed among the European Union’s member states.

"This is an important step in disciplining Google's abusive behaviour in relation to Android," it said. The European Union also hit Google with a separate antitrust penalty of $2.7 billion (€2.4 billion) last year over shopping-search results in Google Search, AdSense product. Competition authorities have said Google prevented third parties using its product from displaying search advertisements from Google's competitors.

Google is appealing that fine and is expected to appeal the new one too, as the tech giant has repeatedly denied these accusations, arguing that smartphone manufacturers have the option to use the open-source software.