Imagine that search results were picked by humans, and the particular human that answered these queries had no idea that Google owned YouTube and just thought that YouTube was a better result. It isn't necessarily the best result and Google is responsible for it, but it doesn't strike me as anti-competitive or any sort of legal issue.

If Google tweaks the algorithm (or tells their human rankers) to prefer Google properties then it is an abuse of power and something that I think is morally wrong.

What’s wrong with manual? Also if I set up a service like that, what would be illegal about it? Nobody would use it, but that’s fine too.