> if companies relocate operations in the same way they relocate certain things for tax avoidance.They already do. Umpteen companies run servers in this or that country for specific legal reason which are not necessarily related to taxation. Classic case: companies with dubious stands in regard to copyright law.
The PATRIOT Act already forced a number of companies to open European datacentres to satisfy particularly-picky customers; it's just that this particular threat was considered mostly theoretical... until Edward Snowden proved the opposite. Now all cloud-services providers must prove their virginity or risk losing sizeable chunks of lucrative European markets, hence why Microsoft is making a stand (on this case, at least).
I do applaud them: if anything, once this process is over, we'll have a clearer picture of what exactly the US government can or cannot ask from US-based cloud companies. We're currently in a fog where the law says certain things but practical experience says another. A realignment in one way or the other would be most welcome.