I don't disagree that finding alternatives will be expensive, but I think this is the same harmful thinking we have in the US where people disagree with regulation that adds necessary protection at the cost of business. So we have a "regulation is bad" mindset. Most prominently I wish we could convince companies here to believe handling/retaining unnecessary data is like handling something radioactive. Until we convince these companies it's a danger to themself, we won't see change. Sure, in the near future US companies will have an advantage continuing to use Microsoft 365, but harm to our privacy and beyond that is demonstrable. I haven't used a computer like its my own private space to think in decades because of what I know is collected with telemetry. My creativity and passion for computing is harmed by what Microsoft engineers its products to do, and glean from my daily use. If Microsoft wants access to a large customer base in Europe, they should make changes to their products that respect consumer privacy laws in that area. I hope we benefit tangentially.
Something-something auto makers conform to California emission laws, same argument.
Absolutes are often bad (i.e., zero tolerance). And many regulations are absolutes. It isn't enough to comply with the law as written, you have to comply with the strictest interpretation that a judge may come up with. And that may not be enough, because some court may be even more creative in their interpretation.
Also often times business like regulation, as it forces all their competitors to play on the same playing field. Which may be easy enough for established players, but is a difficult mote to cross for smaller up-and-coming organizations (regulatory capture).
Then there is the the frequent enough occurrence of conflicting regulations. For example, the EPA may require that an oil change shop store used oil above ground (underground storage can have undetected leaks). But the fire department requires below ground storage (above ground is a fire hazard). So which regulation do you violate? The one that fines you less, and the fine is a cost of doing business.
Yes. Without careful stewardship, the compliance becomes a very weird dance, where regulators might focus on things that actually undermine the original intent of the law. For different example, lets look at the BSA front in US banking system, where SARs as a system was developed primarily to assist LEOs, but due to overzealous enforcement by various regulators, banks effectively threw their hands in the air and collectively said "Fine, we will report everything." ( look up defensive SAR filing if you are curious about the details). And now we are in a weird situation where LEOs have to sometimes say things like "If you file it, make it stand out and tell us why it matters so that we can use it"(paraphrased).
Something-something auto makers conform to California emission laws, same argument.