Microsoft does provide the tools to keep data storage compliant with EU data rules.
https://learn.microsoft.com/en-us/privacy/eudb/eu-data-bound...
It doesn't matter; the CLOUD Act (https://en.wikipedia.org/wiki/CLOUD_Act) means that, even if Microsoft (or any other USA company) takes every care to keep data storage compliant with EU data rules, that data can still be transferred to the USA. The only way around it is to have a completely independent non-USA company hold the EU data; I've heard that Microsoft used that trick in the past, but they stopped doing it for some reason.
https://hackernoon.com/microsoft-announces-the-end-of-the-ge...
I keep reading that, and I somewhat agree, yet I keep seeing a majority of people still exchanging docx files on email or even teams( by uploading new documents each time!) instead of using the collaborative features of office 365.
I think it's habit more than anything - if you've been using Word for 20 years and there wasn't a better option than email you're likely to continue that instead of taking time to learn a new workflow
Uploading word documents to Teams like that is extra ironic because Teams uses SharePoint to store attachments, so you're taking more steps to do the same thing and end up with less functionality
This is exactly what the press release above disproves.