This is so baffling to me. Google has subsidiaries in the EU. The fact that it's ok to give a product to a EU client which can't be used in accordance with the law, and the client is responsible, is just idiotic.
The CLOUD Act expressly brings data stored by US-based companies anywhere in the world under the purview of US warrants and subpoenas.
"The CLOUD Act primarily amends the Stored Communications Act (SCA) of 1986 to allow federal law enforcement to compel U.S.-based technology companies via warrant or subpoena to provide requested data stored on servers regardless of whether the data are stored in the U.S. or on foreign soil."
its real name should have been privacy hole
Huge swathes of Google's architecture (especially its legacy architecture) have deeply-ingrained location-agnosticism assumptions. It turns out to be extremely complex and expensive to remove those assumptions given the way Google handles data once it hits their datacenter fabric.
(Not impossible, mind, just that this assertion that it wouldn't be that hard to do is in "I could build Twitter in a weekend" territory).
My prediction is that as things move forward, they're going to find it isn't worth their money to offer Analytics for European customers if the GDPR continues to make that more onerous (especially since the monetization story of Analytics for Google is so threadbare) and just offer it for customers in other countries while Europe does its own thing. Win-win.
Calling it spying is a little far-fetched I think, when the problem was the transfer ip addresses to US servers, not Analytics itself.
Following the Schrems II case, the "threat model" used by EU courts on these matters is "American law enforcement can serve a warrant to American companies." Long story short, any processing that Google does after collection is not considered to offer any protection, because American law enforcement can just tell them not to do that and they won't. Hence, the "Anonymize IP Address" setting in Google Analytics is not considered to have value for GA.
It might theoretically be possible to use GA compliantly by proxying data through an EU-owned service which obfuscates anything considered personal data, at minimum the IP address and various cookie values. This scenario hasn't been confirmed by anyone as compliant, but the regulators seem to always go out of their way to dance around it rather than just saying "GA is non-compliant, always, forever." Still, for the trouble to set up such a service you might as well just stand up a self-hosted first-party analytics solution.
This particular decision on GA is purely about the cross-border transfers, and doesn't seem to touch on whether using cookies for analytics requires consent. That's a separate issue (technically about a separate law).