Meta’s new app has been listed in the US and the UK, but has no foreseeable launch date in the EU yet as the company worries about the bloc’s privacy regulations.
Threads isn’t yet running in the EU - and it might never run, as the bloc has stricter privacy rules than most other countries, and it has given Meta a few headaches to cope with in recent years. It’s not the EU that blocked the launch of the app, rather it’s Meta who’s being preemptively careful.
Basically Meta is unsure if EU privacy law will allow them to keep functioning so they just decided to not launch there
Threads can't be in the EU unless it's federated, basically. It's likely Facebook/Instagram will adopt federated protocols as well. Facebook has to allow interoperability on their platform.
TL;DR the particular issue called out in the article is that Threads imports data from IG.
Meta is in dialogue with EU regulators as whether this would be seen as one social media platform sharing with another. Until Meta gets more guidance on this and any other possible issues, they are holding off launchin in the EU.