The EU institutions don't represent European values. The Commission doesn't run elections to find out what they are, can't even define what it thinks they are and routinely claims that the results of actual democratic elections in Europe are somehow contrary to those same European values.
> The US is not special
It is in fact special, in that it has systematically kicked the ass of the European economy for decades in everything tech related. The EU doesn't even have second place also-ran companies that compete with Twitter, Instagram, Threads, TikTok etc. It has nothing.
So, fundamentally, Musk can and maybe should tell the Commission that in fact they don't operate in Europe and do not recognize EU laws or what they think European "values" are. I wonder how long the current state can hold for. If US tech firms just state that they will ignore EU regulation whilst continuing to serve requests from EU IP ranges, then what? The Commission would have to impose trade sanctions on the USA (i.e. ban European companies from purchasing services from them), which would invite retaliatory sanctions from Washington.