The telemetry can't be completely anonymous. It's attached to an IP address and the EU considers that PII: https://www.enterprisetimes.co.uk/2016/10/20/ecj-rules-ip-ad....
Disclaimer: I used to work for Microsoft, and this is what we did.
For a longer explanation, see my post about the &aip=1 feature in Google Analytics that does the same thing to the end of the IP.
As an EU citizen, my response to "we're sorry not sorry but due to recent EU laws, we can't continue to offer you this service" is: get bent, go home. I hope we, as the software development community can finally understand and appreciate that the insane proliferation of personal data modern tech has become dependent upon is a Bad Thing.
There are many ways to achieve that goal. I am not buying the argument that automatic data collection about everything you do is there to "improve our software".
I think that's a large part of the reason they don't stand up to the EU.
That really isn't that huge anymore, and it's definitely not growing that fast.
I don't think you want to make a consumer argument because consumers buy expensive stuff everywhere.
There are also larger and more growing consumer markets.
The better argument would IMHO probably be "They need to sell business products and to businesses there, and the EU businesses are spending more than elsewhere".
IE it's a concentration of business wealth.
That is also likely to change over time.
The kind of cash that Silicon Valley corps can throw around could be a serious shot in the arm for Eurosceptic political parties hoping to weaken or separate from the union.
But, for example, the number of consumers they represent is only about half a billion.
That isn't that many.
For example, Latin America has 20% more consumers.
Most could totally could afford to ignore the EU if they wanted to and still have a perfectly good business.
(This assumes their goal is not all out growth but instead are happy with sustained profit at some point)