The European Union's co-legislators reached political agreement on a major reform of digital competition rules late yesterday, which will introduce up-front obligations and restrictions (literally a list of "dos and don'ts") on the most powerful internet giants -- enforced by the threat of substantial fines and other types of penalties if they fail to meet the requirements.

The Digital Markets Act (DMA) is the bloc's response to systemic misbehavior in digital markets over many years.

The regulation has been informed by a string of major EU antitrust cases against tech giants like Amazon, Google and Apple, and an accompanying frustration that Big Tech's dominance has simply continued to entrench itself, as cases take years to conclude, leaving abuse largely unchecked in the meanwhile.

The EU's habit of letting tech giants define their own remedies even when they do (finally) get hit with antitrust enforcement -- with only a general pronouncement that identified infringements must stop -- has also allowed platforms plenty of wiggle room to keep stacking their hand. (Hence the Commission having to intervene again, years later, in the Google Android case to pressure Google to drop a paid auction model that rivals had declaimed as unfair from the start.)

The DMA proposes to flip this hindsight-riven dynamic by fixing conditions up front and applying an expectation of compliance with fixed rules of the road for giants that fall in scope, with the goal of ushering in a new era of more proactive and effective tech regulation. The bloc's conviction is that an ex ante competition regime will supplement the usual ex post antitrust procedures to ensure that digital markets remain fair and contestable.

Despite EU policymakers spending long years mulling whether and then how exactly to act, a formal legislative proposal was only presented in December 2020 -- so it's taken less than 18 months for the EU's institutions to reach agreement on a provisional text. That looks remarkably fast, underlining how much consensus there is around Europe on the need to reign in Big Tech's market power.