Anyone who has a "tech" industry besides US has it thanks to trade barriers and embargoes because otherwise doesn't make sense to have it. The product doesn't have a considerable marginal cost to distribute, doesn't make sense to have it made in more than one place. 50 US states don't have EU regulations and yet everything is still happening in SV only, the rest of the "tech" in US is about as developed as in the rest of the world and they all feed into SV one way or another. Also, there's no way for competition as the capital in US(which can come from Europe, Arabs etc. too) can provide the services at loss for 10-20 years until drives everyone out of business.
EU tried to be open for business and have sovereignty through things like privacy and data control laws but the end result was that whoever is worth their salt goes to SV and sell it in EU from there and when tangental industries like VW or Mercedes need top talent for their software there's no one left or those who are still in EU are not doing things that transfers well into their niche.
ChatControl, IMHO is just some career move of some politicians from the ultra low corruption small northern countries where people trust the government way too much. They appear to believe that they can solve some issues with it. Not that different from all the governments who want control and each one wants as much control as possible.
I think the age control attempts are much more interesting and consequential. Why? Because bots don't have age. If implemented in a way that preserves anonymity while ensuring that the things are written by a real person(or at least has someone responsible for it even if its AI written) it can actually solve the bot problem and social manipulation problems like people from other countries pushing an agenda that doesn't actually have organic roots in the society.
Anyway, the issues are real and the risk are real and I think its a good idea to seek methods to mitigate the risks while keeping in mind that even if you currently like the government in few years the people who you don't like might be in power so, be careful.