Regulation has little to do with it. Most of the tech industry is inherently winner-takes-all or winner-takes-most because of how easy it is to scale up tech solutions. US companies get a huge head-start because of their large home market compared to the fragmented EU market, and can easily carry that advantage into also dominating the EU market.

There is a reason Russia and China have strong tech companies and Europe doesn’t. That reason isn’t lack of money, lack of talent or regulations. The only way for Europe to get big tech companies is by removing or crippling big US companies so EU companies can actually compete. The US companies would be quickly replaced by EU alternatives and those would offer high compensation all the same.

Whether or not that is worth it from the perspective of the EU is not so black and white - tech is obviously not everything - but the current situation where all EU data gets handed to the US government on a silver platter is also far from optimal from the perspective of the EU.