Yes, which slows down the rate of advancement. Put it this way. Let's say Amazon develops some new tech that creates super fast transfers, superfast charging or any other magical item that is on your wish list. Unless everyone gets on the same page, this advancement never reaches comsumers.
Forcing companies to standarize is stifling competition. In the long run, it's going to do the opposite of what is intended, IMO. How long will it take Regulators in the EU to approve a new standard? Historically, by they time they do, there will be better options available.
That might be true in other scenarios. But specifically regarding consumer tech and charging ports, there is no physical or wireless port/cable on the horizon that promises anything more than what the best USB-C version can deliver (Thunderbolt, etc.), or a standard that can't be made to fit within the specifications of USB-C cable/port technology.
You can go through all the literature and news articles on the subject. There is no such tech in the near future. It's all speculation and prototypes at best, none of them markedly superior to USB-C on enough metrics to warrant a shift away from USB-C.
Plus, even Apple itself repeatedly touts USB-C as superior by comparison to products that don't feature it and clearly segments its cheapest products to never get it so that you have to buy at least the mid-tier iPad Air to get increased transfer speeds and display connectivity.
Look at this extensive marketing paragraph -Apple doesn't even mention a single word on transfer speeds on iPhones and hasn't done so for close to 10 years because of how embarrassingly inferior it is by industry standards, or just plain terrible by comparison to what iPads Pro and MacBooks get for absolutely no good reason other than pleasing its shareholders.
Furthermore, Apple has kept Lightning at USB 2.0 speeds for all iPhones since it was introduced in 2012 with the iPhone 5. It even shortly implemented a new USB 3.0 version of Lightning but only used it in one or two generations of iPads Pro only to jump to the much better USB-C for the 2018 iPads Pro. Not even iPhones Pro could get this marginally upgraded version of Lightning.
If Apple actually cared to give consumers better than the best of what other brands can offer, then it would have opted for USB-C or a superior, proprietary port/cable.
Instead, all of Apple's aggressive "innovation" has tied iPhone buyers to the vastly inferior, USB 2.0 speed Lightning port for nearly a full decade.
In this particular case, government regulation isn't stifling innovation. It is dragging the entire tech industry forward by the ears because it's been holding iPhone users back for way too long.
Additionally, Apple will always be able to sue the EU and win back its freedom once it can present the numbers on all the innovative ports it hasn't been able to put in its products.
So until Apple gathers all its evidence and paperwork we can hopefully get back to industry standard transfer and charging speeds for iPhones for the moment. The only downside to this is for Apple's shareholders who will slowly have to kiss that sweet Mfi royals money goodbye. But for consumers, this is nothing but a win.