Personally, I think it is tantamount to invasion of privacy without probable cause if the countries are allowed to sequestor information on a particular citizen.  Is there privacy any more, or is every word spoken and written word should be assumed to be of public note.  Should citizens then counteract with encryption algorithms which take even the most powerful computers days, if not months to decrypt?  It allows no freedom of speech, but after all we are not a singular society of laws, we are multiple societies of conflictional  laws that do not coalesce into a unilateral or singular personal privacy law.  Therefore, multinational corporate conglomerates, are subject to conflictional personal rights laws, which cannot be easily reconciled. Which laws of what land takes precedence, especially if a specific communication originates in one country with specific laws and the end of the communication ends in a country with opposite laws, which require ring fencing.  Unilateral personal rights laws across the globe are problematic to global conglomerates, and inhibit progress.  There is no precedence to these laws which span communications between countries.  Unfortunately, a global unity such as a legal body of personal privacy protection as well as the protection of sovereignties does not exist.   Maybe an ISO ruling under the U.N, should have teeth to agreed upon and enforce rights that protect both the individual, group, and sovereignty when precedents dictates,  These legal matters inhibit progress, for better or for worse,  Thanks to the New York Times title, which sparked my neurons, Governments Worldwide Asking Google to Hand Over More Data

Amendment (12/04/12):

After thinking this through, the ultimate conclusion is the Google / China effect, whereby to respect the locality rules of the sovereignty, e.g. ring fencing data, content ratings, export of data, a multinational corporation isn’t excused from those rules just because they are the biggest player and can muscle their way into the country forcing their own process upon the local society.  We’ve had too much of that in human history.  Therefore, if, for example Google has a centralized data center for all of Europe based out of the U.K., and the Island of Jersey off the coast has ring fencing rules whereby you must keep the data within the country of origin , so if both sender and receiver reside on the Island of Jersey, the data must remain on the island.  Google, or any other multinational has two choices, figure out how to abide by local laws, and implement them, or make the executive decision to exit the market, just as they did with China.  In China, another major player sprung up in Google’s place in this market, and perhaps even more may spawn in Google’s place.  It is simply the cost of doing business in that country.  In our Island of Jersey example, Google might be required to build a small data center just to house the Island of Jersey specific data, for ring fencing compliance, and man it as well.  The cost, Google might think, outweighs the reward for them.  Basic economics.  Other, perhaps smaller companies, may jump in to seize the opportunity, which the multinational Google, walked away from based on their assessment of doing business.  This creates opportunities for other companies and people.  In fact, the people promoting this advertising campaign of a free internet, such as the multinationals, probably have the most to loose by imposing their process against the government laws of a sovereign land.