Don't forget that "Hosted in Germany" is also a red flag for a lot of companies that they may be arbitrarily assessed massive fees to prop up other businesses[1]. As is the same with many EU countries[2][3]. You're taking a risk wherever your data is stored.
So, you can either have to implement good data protection so that your users don't have to worry about the FBI snooping in the U.S., or you can run the risk that some country in the EU decides to prop up some failing industry by extracting unreasonable tolls out of your company. Personally, I'd go with the former, but that's just my opinion.
[1] http://www.bbc.com/news/technology-17785613 [2] http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a... [3] http://www.engadget.com/2012/02/02/french-court-fines-google...
So, you can either have to implement good data protection so that your users don't have to worry about the FBI snooping in the U.S., or you can run the risk that some country in the EU decides to prop up some failing industry by extracting unreasonable tolls out of your company. Personally, I'd go with the former, but that's just my opinion.