Microsoft Ireland would be constrained by european law from exporting the data. Is that not the case?

The real issue at stake here is the very notion of cloud storage versus location storage. Not just laws and controls but existence. If I pump something into the cloud then it should be a cloud and where the data actually resides should be obscure at best. I would have thought that best practice for a cloud supplier would be to have everything RAIDed around the planet. Multiple redundancy, only fragments on any particular server.

Again you are confusing Microsoft USA with Microsoft Ireland. They are not the same.

An Ad hominem. Your admission of defeat is accepted. And I wasn't even competing.

Sure Microsoft could. But the court could not order it. As to your chair in Europe, you might own a chair in Europe but what you do with it is still subject to European law. For example, certain historical artefacts may not be imported/exported. Ownership is a limited right.

Is this why governments all over the world are selling off the infrastructure?

Err.... No, No US court could claim ownership or seize a foreign company without going through that companies courts. They might be able to seize Microsoft US but not Microsoft Ireland without due process.

The data in question is held by Microsoft Ireland and fully owned subsidiary but separate legal entity. The judge cannot require Microsoft Ireland to produce the data as it is not a party to the case and as a foreign company must hold to the law of the territory where it is registered. So Microsoft US neither hods nor controls the data so the request to produce it is moot.

Microsoft US does not own or control the server in Ireland. A fully owned subsidiary, Microsoft Ireland does. They are required to follow EU law.

Microsoft Ireland is not a US company. It is incorporated in Ireland. If Microsoft US requested or ordered Microsoft Ireland to supply the data then Microsoft Ireland would be bound by EU law to refuse it. The limit of Microsoft's ability there would be an endless chain of hire and fire if MS Irelands executives and employees.

No. The order to produce went to Microsoft US. The data is under the control of Microsoft Ireland, a fully owned subsidiary registered in a foreign country. Since Microsoft Ireland has the legal obligation to refuse the data to Microsoft US, Microsoft US neither owns not controls the data and cannot be compelled to produce it.

Microsoft US does not control the data. A separate company (Microsoft Ireland) does. Now it may be a fully owned subsidiary but it is still a separate legal entity. The question here is not what people think it is. Does the judge have the right to demand that Microsoft US instruct Microsoft Ireland to break Irish law. The answer to is no because the data is not in the possession or control of Microsoft US. If Microsoft US were to make the request of Microsoft Ireland the correct (and required) response from Microsoft Ireland would be "Sorry, we cannot do that even though you own us.". So since Microsoft US does not control the data the request from the judge would be invalid. Microsoft US cannot comply with the directive since they do not have direct access in their own right.

Because the US constitution requires that international treaties become part of US law when signed.

Excuse me but you appear to be mistaken. it is written in the US constitution that international treaties become part of US law. Where that introduces contradictions the treaty law applies. And judges have to repeat this. It may not apply in this particular case but it remains true.

Any "dick move" would be at minimum, contempt of court. That is extraditable and yes, the U.S. And Australia have a treaty. Many treaties. Not all are economic. You have no idea how deep this could go. No one enjoys a shit fight. It would not be allowed to get that far. Most probably this is happening and happening right because the ACCC wants to get up the nose of the horribly consumer unfriendly new Abbot government.