If you build a social media there is nothing the policy maker can do to stop you.
Tighter moderation and copyright requirements can stop everything. The USA had excempted platforms from holding them responsible to allow broad innovation by everybody. The EU does the opposite and ads more requirements. Nothing that kills an established company but it’s deadly for anything but the most serious startups.
The EU must know about the US excemption. They are not ignorant so they chose to not create competition and to leave that market to the US.
It’s not prohibitive but an obstacle. Facebook can build neural networks to automate legal obligations and it can hire lawyers to minimize damage when they fail. Everybody can try though to build a new social media but nobody will.