They did have a say, before iPhone and Android happened, devices have been branded, sim-locked, locked down etc by the carriers. I think they mostly stopped doing that in recent years.
I’ve been living in Norway since I was born back in the 70s.
We’ve never had carrier-branded phones. Not one. Only thing sold has been generic phones which accepts a generic SIM.
And that’s how the market is supposed to work. Free competition on devices. Free competition on service. Customers can combine as they like.
Granted you could buy carrier-locked phones rebated through a contract, but the carrier lock was time-limited and reversible and the phone was a generic, international model.
Carrier-branded phones was definitely not a EU-wide phenomenon.
If anything the introduction of the iPhone in Europe (launched using the very confusing US carrier-model) was what started pushing carriers into attempting to making new restrictions on how people were allowed to use their (formerly unrestricted) subscriptions.
You said "in Europe", when you must have meant "in Norway".
In the UK there were DEFINITELY carrier branded phones, tethering was disabled by many carriers, and you couldn't even use a regular SIM card in a non-phone device - you needed a "data sim".
I travelled around Europe for 2 years using local SIM cards - and also encountered carriers which disabled tethering.
There were even android apps specifically to work around these tethering restrictions, by making the phone act as a proxy.
Same for Austria, which interestingly was considered a "test-market" for international carriers, thus we always had the cheaper contracts and some novel business models quite some time before the rest of the EU (unfortunately not network generations or coverage in general).
The answer is money. Tethering was usually not allowed but you could buy in. You get phones for free, but only if you pay 40€+ a month for the next 2 years for something you actually don't need. E.g. some unlimited services (streaming) while your general data is capped.
I haven't been in the market for such contracts for quite a few years, this has changed a lot in recent times due to "contract-less" cheap providers gobbling up the marketshare. And these packages always disappeared over time and became standard. I don't think tethering is not allowed anywhere anymore.
This is how the free market should work. Providers tried to extract more money by forcing contracts, other providers swooped in with contractless plans and captured a significant market share.
I am pretty sure carrier-branded phones were a thing in Central Europe (Slovakia, Czechia, Austria, Germany etc) for many years. As the owners of carriers were also French (Orange) or Spanish (Telefonica/O2), I suspect they present there too. So no, not backwards at all.
