While I agree with your main point that this type of legislation doesn't necessarily stifle innovation, the line of what is considered abuse is subjective.

Legislation like this is effectively either the EU attempting to force their opinion of what is an acceptable use of tech on the rest of the world, or the EU committing to potentially fall behind on moral grounds. I actually greatly respect the second scenario if that's the situation, we'd all be better off if people chose their morals over profit and fear.