I don't know whether they can, but Microsoft tried to work around that by having (one of?) their German Azure DCs be managed bei Deutsche Telekom for exactly th

I don't know whether they can, but Microsoft tried to work around that by having (one of?) their German Azure DCs be managed bei Deutsche Telekom for exactly that reason: their relationship would be defined by a contract, but Microsoft does not own Telekom and thus can't send them a memo to ignore the contract. I don't know the details, but I'm sure Microsoft considered whether it would be enough to just stick a "Microsoft Deutschland GmbH" label on it.