What? Is this new at all? I thought it was well understood the internet can and is regulated however a national government will see fit. If a company or website doesn't want to comply then deal with the legal consequences in the country that issued the judgement against them, or they can stop doing business in that country. People in the west have this myth that the internet is a global thing that transcends borders and belongs to everyone. That's patently false.
China already has a very insular and domestic web presence. Because of the firewall and other cultural reasons, the Chinese have their own website or app for just about everything. It already is a national internet, not an international internet. And companies like google have already learned that they either comply, or stop doing business in the country. The EU isn't nearly as extreme but the same principle applies. They have their own rules that global companies either comply with or stop doing business there. Between the USA/EU/China you already have de facto competing legal regimes, each able to leverage their market size and importance to force internet companies to act in compliance, or risk losing the entire market.
I don't think the problem is really all that relevant or complex. Seems very similar to issues regarding international taxation.