The proposed regulation – like many EU regulations – can also apply to non-EU entities. In this sense, the EU does try to exert extraterritorial jurisdiction.

However, this is constrained to the case where the non-EU entity targets people in the EU, so somehow participates in the EU market. The origins of this “targeting criterion” actually come from consumer protection cases, where it's easy to understand: if you advertise your goods or services to people in a particular country, you'll have to play by that country's rules.