You end-up with fragmentation of corporations not fragmentation of the internet. If Google sets a self governed license based entity in Europe with staff from

You end-up with fragmentation of corporations not fragmentation of the internet. If Google sets a self governed license based entity in Europe with staff from Europe(executives including the CEO etc) then you have two separate entities playing by different rules(EU based or U.S based) linked just through a licensing deal. Think of it like Microsoft sells On-premise Azure instalations to governments. The EU and US entities would share no internal data b/c they would be two different companies that use the same software for different clients.