The problem here...
The problem here is that ICANN is not bound by EU regulations. They are only bound by US regulations because they have a contract with the US Department of Commerce (USDOC). So the way that I see it, ICANN can pretty much do what they want as long as two things are followed:
1. They follow US laws.
2. They uphold the terms of the contract with the USDOC which is not available publicly.
Since ICANN has sole control over a number of TLDs, and they also run the 13 root name servers, they can easily sanction any registrar who does not follow their rules if ICANN wants to play hardball. The best way to handle the situation would be to go through a treaty/international agreement to file a complaint with the USDOC.
In other words, the reality of the situation is that we have a corporation who exists entirely in one country, following the laws of that one country, who has the power and ability to dictate to the entire planet how things are done, regardless of what local laws/regulations say because of their unique position. The local governments do not really have any power to enforce their own laws in their own country because said corporation has no assets to leverage in that country. So the corporation can punish/sanction their members without fear of repercussions from those local governments.
So ICANN can tell the EU to pound sand, sanction EU registrars, and thumb their nose at any fines the EU may impose since a EU court decision is not binding inside the borders of the US. There is case law here in the US to support this viewpoint (mainly with France). I think the UN's ITU should take this over, but because of the aforementioned reasons, the US has to agree, and so far they haven't. The EU could form their own DNS system, but then we run into the situation where you now have two conflicting systems (TOR is an example).
I live in the US myself, and I don't like it, but this is the reality of the situation that the world is in. Because of our power and status in the international community, the US has a habit of ignoring UN directives.