Re: Will the German government be sensible?
My understanding is, if Microsoft lose and Microsoft US has to hand over the data...then the executives in Ireland will be liable to prosecution under EU data protection laws.
Your understanding is wrong. Data is shared and moved across borders all the time.
What EU data protection laws do you think they could be prosecuted under?
Anybody using a Microsoft cloud offering should look at the terms of service:
"Microsoft will not transfer Customer Data outside the major geographic region you specify (for example, from the United States to Asia or from Europe to the United States) except:
where you configure the account to enable this, including through use of features that may not enable regional selection or may use multiple regions, as specified in the Microsoft Azure Trust Center (which Microsoft may update from time to time but Microsoft will not add exceptions for existing features in general release); or
where necessary to provide customer support, to troubleshoot the service or to comply with legal requirements."
If you're a user of the service, that's what you agreed to.
Tough titty if you didn't read the small print.