Depends on your perspective. It might be that American/Chinese predatory service providers are instead locked out of the European market, allowing the breathing space for local solutions to flourish.
If your local providers need the rest of the world to be kneecapped in order to compete, you may want to start with that problem.
The EU consumer will end up with strictly worse solutions and all the rest of the world will “gain” will be the crappy trade-barrier-supported Euro versions of Google and Facebook.
This is a short term view. There's a certain amount of 'activation energy' that a system needs to be able to kick off and become self sustaining. If a giant generalized, subsidized solution already exists PHBs are much happier to spend years trying to knock a round peg into a square hole than take the risk of doing something bespoke for the problem at hand.
Creating an artificially easy sandbox for your local engineers and entrepreneurs by banning the competition will not lead anywhere good. Competing with the best forces you to improve; playing on easy mode leads to stunted skills and inflated confidence - and worse products, companies, and economies.
It isn't banning the competition. It's forcing the external competition to follow the same rules as the locals w.r.t. privacy laws. The fact that the external competition can't comply means that there's a market niche available which locals have an opportunity to exploit.
