An OS sharing all your data even with snooping disabled falls under this regulation, and multiple EU data privacy officials are already investigating and preparing a case.
Microsoft once already was under EU investigation and the whole thing was settled with minimal efforts for Microsoft (the only thing I remember was, that they had to provide a browser selection screen).
When the OS sends encrypted data to their servers, who will prove, that their is an offense made? Even when the terms are troublesome in the EU, they will just make some cosmetic changes to the terms for Europe. There are other terms, that are not valid in the EU, but Microsoft did even not change them yet (as much I know), even when it gets problems to enforce them on the courts.
Privacy might be a issue in Europe, more than in the US, but don't forget: the privacy officers in Germany have nearly no power, and are laughed at or ignored by most politicians.
Microsoft has nearly nothing to fear, IMHO from the EU, so long the US jurisdiction is also holding its peace. In Germany/the EU, nobody has the guts to fence to hard against a large US corporation -- but that is my opinion.
It would be nice, when the EU would act on it, but I don't trust it!
They fought many battles, especially against Facebook, which led to court rulings in the manner of "Instant change of terms, instant destruction of data, or 6 months jail for the CEO".
Internationally, many might laugh about the ULD, but you do not risk a fight with them. And now, with them starting to look at Microsoft, I would not want to be in Microsofts place.
If you hadn't read the EULA/ToS/Privacy Policy/etc, but had consented to those (by clicked "agree" in case of click-wrap packaging thingy), the fact is Microsoft is very unlikely to be held accountable if their actions are perfectly conforming to the agreement you had agreed without even reading. Something is surely not right with this whole situation.