problem is more global than just Europe, many of these compaines are headquatered elsewhere, they are simply using th EU to access the MS code in the EU, then they can use it free of charge in anything they want. MS shouldn't have to bow down to the EU, no one should to be honest. They are more corrupt than any middle easter dictatorship could ever dream of being.
If MS fails in the appeal they can go to online ordering/shippping also, or ship to retailers only that order from the US. It would cost Europe more money then, but close the MS office in Europe and transer all stocks to the American market. Simple as that, then jack the price up 20%, lock out the code these people have obtained and write new code they have to buy. MS shouldn't have to give anything away. IF i was Steve Ballmer id make it hurt the entire continents economy. Not to mention it would give them more time to improve there products for the other markets that actully want the products and are willing to play by MS's game. Shut down xbox live, stop 360 warranty service and sales ect of MS products in all EU nations ect, make it impossible without paying extravagant fees to even use an MS product in Europe. I promise that will catch the EU's eye and make them revoke there stupidity
While i accept the EU is not free of corruption as with power comes corruption I somewhat think you are judging it a little too harshly in comparison to dictatorships. It also seems very narrow minded that you associate the middle-east directly with dictatorships, there are and have been many dictatorships outside the middle-east.
In terms of pulling out of europe this simply wouldn't happen. Europe is a massive market for Microsoft products and they make a lot of money which they couldn't stop making as it would negatively effect their share price.
I also question why it is wrong to prevent a company gaining an almost 100% monopoly on the market by preventing competition in the first place causing innovation to grind to a halt and preventing private organisations from using their dominance of the economic markets to gain political power over governments.
It is very dangerous when profit making companies with very inward interests gain political power and it is something you may wish to consider when you examine the current state of the American government (not that ours is much better atm but that can be partially associated to this bloody stupid 'special friendship' we're are meant to have with the US)
America associates itself with a very extreme form of capitalism and while the EU does also for the most part follow a similar style it is not quite to the same extreme level taken by the US.
There will always be disputes between countries and the different ways that they do things. This is not to say that say of these ways are inherently wrong but they may contain fundamental differences. Companies such as Microsoft want to have access to all of the big world markets as exclusion would lose them vast amounts of money. In addition in Microsoft were to pull out of Europe causing the EU community to have to switch to Microsoft competitors this would have knock on effects causing them to lose ground in other areas outside the EU(granted not on a massive scale but still...)
NB: This post was in no way intended to insult anyone but people must always remember that a wider view must be taken when looking at international issues and if a company wishes to deal with everyone in this community (which Microsoft do) they must respect the laws which define the markets they wish to be a part of.