In the EU some companies simply cannot grow because of laws like that. They might want to grow, but can't because of laws that says if your company has more than X employees you suddenly have to deal with a bunch of extra bureaucracy and reporting requirements. These companies purposely stay small, and basically has stopped hiring, even if they could use more manpower.

This has its own issues. Big bad actors can now split their activities between more smaller companies to avoid some regulation. I've seen it happening.

That would just add tons of extra paperwork and a much larger administrative system to vet all the sizes of companies. IRL they will probably not even be enforcing this widely (like GDPR) but the costs will still be imposed on any business wanting to sell in Europe.

Selective enforcement is a tyranny generator.

How about the law doesn’t exist if it doesn’t actually make sense?