It's anti competitive for the same reason auditing companies are not allowed to have consulting arms or if they do, they should not both work for the same customer at the same time. Channel 1 (auditing) vs channel 2 (consulting). At least in theory.

There's a conflict of interest at the heart of the issue.

Google offers a service which is supposed to be neutral (search) and then on top of that it also sells another (ads) which is at odds with search. Good search results should bring the best result but ads are a way to bypass that with cash.

Microsoft had the same problem with Windows (level playing field) + Microsoft made apps on top of Windows (which didn't want a level playing field).

That's a conflict of interest, not anti-competitive.

Yup, search for "Google Chrome" on bing and a loud Edge promotion awaits you.