Europe should just create their own social media companies where the government can act as a moderator of content then.

"Europe" is a continent made up of independent nation states. Each of those nations has chosen to have its own rules about what is and is not legal, which is the right of every country. Those nation states want companies operating within their territory to follow their rules. There is absolutely nothing wrong with that, it is up to each individual country.

At the same time, I do not understand how what you wrote is in any way relevant to the topic.

EU gives out tons of grants for tech and the W project was already being spun as a European social network (despite not yet being funded) https://old.reddit.com/r/europe/comments/1qiauhd/bye_x_europ...

Sorry, I clearly misunderstood the intent of your comment. I thought you were saying they should just build their own platform if they want to moderate it. My mistake.

In any case, you’re right. The only concern is that projects like this that start in Europe often end up being acquired by American companies, so I’m worried it could end up the same way.