Under the Digital Markets Act (DMA), giants such as Google and Apple will be forced to open their services and platforms to other businesses.
“What we want is simple: fair markets…in digital,” said EU antitrust chief Margrethe Vestager.
“Large gatekeeper platforms have prevented businesses and consumers from the benefit of competitive digital markets,” she said.
The announcement is the biggest regulatory move yet from the EU to act against what it defines as “anti-trust” or anti-competitive behavior from mainly US technology businesses.
“The agreement ushers in a new era of tech regulation worldwide,” said German MEP Andreas Schwab, who led the negotiations for the European Parliament.
The Digital Markets Act dictates that Apple would be forced to open its App Store to third-party payment options instead of users being coaxed into using Apple’s own payment methods.
Google will be asked to offer people who use smartphones that use the company’s Android operating system alternatives to its search engine, the Google Maps app, or its Chrome browser.
Apple would also be required to allow users to uninstall its Safari web browser and other company-imposed apps that users cannot delete at the moment.
The targets of the law include WhatsApp, Facebook Messenger, iMessage, the App Store, Google Play, and many other services belonging to large tech firms.
However, Apple said it was “concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users”.
Meanwhile, Google said: “While we support many of the DMA’s ambitions around consumer choice and interoperability, we’re worried that some of these rules could reduce innovation and the choice available to Europeans.”
The law will only affect companies with a value of more than €75bn (£63bn), annual sales of €7.5bn, and at least 45 million monthly users.
This proposition was brought forward by Ms. Vestager just over a year ago in reaction to what she felt was monopolistic behavior from Big Tech. She was known to be frustrated by how large US tech companies had managed to delay and even thwart EU attempts to fine them.
“The gatekeepers – they now have to take responsibility,” Ms. Vestager said on Thursday.
Many US politicians are also keen to clip the wings of Big Tech.
The DMA now faces final votes in the European Parliament as well as by ministers from the EU’s 27 member states.