Domestic incumbents (social networks or messenger apps) would need to jump through the same hoops. So, I would say that, as a whole, the goal is to get people to self-sensor and to fear the establishment.

If the EU wished more competition by domestic companies, they could simply pass a law restricting the income tax by member states to not go over 50% of earned income. In my current jurisdiction, a lowly IT worker can easily pay a 66% tax rate, with 54% being paid as nominal taxes and the rest going as employer taxes. Unless you are self-employed, in which case you will get to pay your 66% with no smoke curtains in the middle.