Violating the EU data protection directive would make microsoft liable for a fine of up to 5% of global turnover. Microsoft has been the recipient of EU fines before, so they are likely to wish to play it safe. On the other hand, violating a court order will find them in contempt of court, which may also lead to coercive fines. Since they're facing fines either way, can we assume they are actually making a moral stand here?
No, we can't assume that, for the simple reason that the logical financially motivated conclusion to that is take whichever path will result in less fines. I'm not experienced in this area but I doubt the US would fine Microsoft anywhere close to 5% of it's global turnover for contempt of court while an appeal is pending.
As others have pointed out, the prospect of fines is not the only factor motivating Microsoft. There is also the dwindling trust of potential customers in Europe. If they roll over to the US government on this one, it's another strong argument for anyone in Europe to avoid the MS cloud.
