They are most likely compatible until a national security letter arrives. An American company then has to choose which law to comply with, and it's an easy choice.
But companies can be a lot shadier than we give them credit for. Like, remember that "wink payment" contract between Google and Israel? If Google knew what they were doing, they accepted the contract to do the illegal thing, so they'd sell their product and get money, but they were planning to simply not do the illegal thing, breaking the contract (the customer would never know and if they somehow did, you can't stop using a cloud on a dime) but not breaking any laws.
If Microsoft knows what they're doing, they'll accept contracts from EU customers that say "we will never give your data to US authorities", they break it immediately, don't tell the customer and the customer never finds out.
Alternatively, they can give the US government a bunch of nothing, in order to comply with the EU customer contract, and pretend this is all the data the customer had on their account. I doubt this will happen though.
