As a European software engineer I'm calling BS on your statement, Mr Manager. EU legislation might not aim to stifle innovation (in contrast, they're always talking about a "level playing field") but their imprecise and vague regulation texts are like a loose cannon for whatever innovative business might come up if you have your first hire to be "the lawyer who gives legal advice in context of EU regulation".
Now, those people will just quietly move away to find a new home-market for scaling up and then eventually selling to EU countries. This is not "lagging behind" but an economical fiasco since the same laws only help local oligopolies of gatekeeper enterprises and (the ones they initially aimed for) Big Tech who can afford licenses and lawyers.
Two little examples (but there's more):
- What about the safe harbor thing? It's all a grey area now after court rulings decided that pretty much all US-EU IT biz is at least partially violating the EU regulations.
- We're now all happily clicking cookie banners and startups are getting sued by third-rate law firms. Some things were good with GDPR but did it help with Big Tech's (and meanwhile Tiktok's) way of collecting data? Nope.