Re: Or the fourth option...
This is always brought up about such things.
The regulators really wouldn't care very much. They get paid either way. And they can claim it's "opening up the market" (which is what you want such regulators to do, really, isn't it?). Also, every Google competitor will jump behind them and claim that they were just protecting "the small guy" and love them for it.
The biggest answer really is "Would you like to lose 50% of your revenue from one of the largest markets in the world?" Often the answer is no. Because people forget that annoying the EU has major ramifications for any international company, because it's often the second biggest market they trade in, if not the first. Nobody's stupid enough to throw away 50% of their worldwide revenue for the sake of a bit of legal work. Did you see company's responses to GDPR? Even US-only companies were diving for cover.