Still they pay more than market. EU salaries are not very high in general, but taxes are. So big tech firms just need to pay a bit more than the market to attract talent.
£160k/year won't allow you to even buy a family home within 1 hour distance to the office over 10 years that is around maximum you'd spend @ FAANG as a SWE. It's truly pointless to feel good about it even if it is considered "insane money" due to really low London engineering salaries (worse than Munich on average). For the same work you'd likely get 350k CHF in Zurich (and won't be able to buy apartment either as Swiss aren't selling).
Working near a major station like Kings Cross where Google is gives you a really wide area with a sub 1 hour commute. Plenty of commuter towns in that radius have housing easily affordable on half that salary.
The comparison remains valid, even if it only tells you that the people not earning the big bucks in one place make more than their counterparts in another.