Sure they can, but it's a huge market almost on par with the US and it opens them up elsewhere in the world to competition emanating from the void they leave in the EU, i.e alternate OSes and search engines.
I get this completely, although let's say Microsoft just ignored their requests for compliance. Would the EU seriously dare to ban Windows? I feel like they'd get outrage from their own locals and topple their own economy if they banned Windows, so they probably wouldn't. Therefore, does Microsoft need to care? Could they just sit around in Redmond and keep developing as long as the US doesn't care?
As for websites, some countries could just block a US website that doesn't comply with local regulations (e.g. China, Iran, Myanmar, et al.) and this has happened numerous times. But the EU? Having already reached a free speech society? Censoring a US website on the grounds of non-compliance with arbitrary one-sided demands would be at odds with their own established bill of rights.
Google said "to hell with it" to China and got blocked.
But what if they did the same to the EU? I don't think the EU could block a website without causing serious upheaval from their own citizens.
They would fine Microsoft. If Microsoft didn't pay they would have their assets seized. Or their credit rating damaged. Their credit rating drop could then put them as junk status and thus mutual funds would have to divest from Microsoft. Microsoft share price would be negatively affected.
As for websites, some countries could just block a US website that doesn't comply with local regulations (e.g. China, Iran, Myanmar, et al.) and this has happened numerous times. But the EU? Having already reached a free speech society? Censoring a US website on the grounds of non-compliance with arbitrary one-sided demands would be at odds with their own established bill of rights.
Google said "to hell with it" to China and got blocked. But what if they did the same to the EU? I don't think the EU could block a website without causing serious upheaval from their own citizens.