It means all the data captured in the EU is governed by EU data protection / ePrivacy etc regulations and the CLOUD Act doesn’t apply
Whereas a US CDN vendor is captured by requirements the CLOUD Act and so there’s no guarantee of privacy for EU site visitors
I used to consult for a Canadian firm. Their sales folks complained that prospective accounts from outside the US would often include in their negotiations something to the effect of “you need to service our account through a non-US entity.” This firm had no non-Canadian entity.
But it was a very well known tech firm, so the assumption was that it was American.
Turned out the objections from prospects got a lot more strenuous (read: deals from non-US prospects not closing) when the firm’s cloud services were only available through AWS in the US.