I think (but am not sure) that there are long established postal laws in most territories about sending “obscene” material through the mail. I think this was used to prosecute pornography publishers in earlier times. BUT you needed to (a) intercept mail and (b) have a good reason and (c) get a warrant to open (interfere with) that mail.

Possessing pornography was a separate issue which may or may not be allowed. Typically (I think) authorities went after publishers not consumers - because they were easier targets to pin down.

Which would seem to imply that if you’re sending encrypted traffic at the request of a recipient the as a publisher of “obscene” material then unless you are delivering very clearly illegal content to a user then you should not prosecuted.

I haven’t got a single source for anything I’m saying, so I might be entirely wrong - I’m simply going off half-remembered barely-facts. So please do argue with me!

This is basically a mutually assured destruction scenario.

The US is not going to let all US companies get fined out of retaliation, so there would be more retaliation from the US against the EU, and everyone else. In the end everyone loses, except for China, which as you mentioned is not stupid enough to play these games and decided to simply pick a lane.

China locks down the Internet and blocks foreign players (to varying levels of success). They don't reach overseas to prosecute foreign executives or fine Meta for not removing Party-critical content from Facebook. Of all the parties that could be involved in this censorship drama, China is somehow the most honest.

> Another more plausible scenario is countries simply start repealing safe harbor laws.

It already happened via GDPR to some degree. CJEU ruled in December that platforms can qualify as controllers for personal data published in user-generated advertisement. The given reasoning was basically that the platform determined the means and the purposes of the processing.

Due to that they can be liable for article 82 damages.