Earlier quoted context omitted.
It's trivial to comply with EU privacy regulation if you're not depending on selling customer data. But if you say "It's because of regulations!" I hope you have a source to back that up.
It is because of regulations. Nothing is trivial and anything has a cost. Not only it impacts existing businesses, it also make it harder for a struggling new business to compete with the current leaders. Regulations in the name of the users are actually just made to solidify the top lobbyists in their positions. The reasons I hate regulations is not because billionaires have to spend an extra week on some employee's…
But, in my experience, it is also true that "regulations" is sometimes a convenient excuse for a vendor to not do something, whether or not the regulations actually say that.
Years ago, I worked for a university. We were talking to $MAJOR_VENDOR sales about buying a hosted student email solution from them. This was mid-2000s, so that kind of thing was a lot less mainstream then compared to now. Anyway, suddenly the $MAJOR_VENDOR rep turned around and started claiming they couldn't sell the product to us because "selling it to a .edu.au domain violates the Australian Telecommunications Act". Never been a lawyer, but that legal explanation sounded very nonsensical to me. We ended up talking to Google instead, who were happy to offer us Google Apps for Education, and didn't believe there were any legal obstacles to their doing so.
I was left with the strong suspicion that $MAJOR_VENDOR didn't want to do it for their own internal reasons (product wasn't ready, we weren't a sufficiently valuable customer, whatever) and someone just made up the legal justification because it sounded better than whatever the real reason was