The EU has no leverage. Its own institutions are all 100% Microsoft shops with zero interest in changing that. The US has sanctioned staff at the International Criminal Court meaning MS suspended their Outlook accounts, and the ICC seems to have done .... exactly nothing. The chief prosecutor there had to open up a new personal account at Protonmail instead, although Protonmail keeps talking about leaving Switzerland due to new surveillance laws also so it's unclear how long it'll remain European (and of course Switzerland isn't in the EU anyway).
Simply put: can the EU do without US tech? No. Can the EU Commission do without extra tax revenues from US tech? Yes.
The opposite is also true, what Big Tech can do without the EU? It's their most profitable market and it's not like they are going to make up for the loss by selling in China.
The US tech industry doesn't have as much leverage as they think they do, the hardest part to replace is the hardware, which mostly isn't built in the US anyways
That reminds me of Mark Zukerberg which threatened to leave a while back... and denied it soon after realizing the bluff didn't work.
The benefits may not be sufficient to offset the harms you see, but if you don’t understand how and why these capabilities are used by services, I’m also suspicious you understand the harms accurately.
Betting on Play Integrity to solve that is betting that devices will become more expensive in the future, that's quite obvious that the opposite is happening, they are getting cheaper and cheaper.