In the financial sector, the extra-territoriality of US laws has been a problem for decades. Securities issued in the EU, by EU entities and marketed to EU investors end up having some language referring to which US regulation they fall under out of fear that a US person will end up buying it, and the US applying their laws and regulations.
This is a problem for the internet that has long been present but is increasing: multiple jurisdictions with global reach. Historically the First Amendment has shielded the internet from a lot of attempts to interfere with it, but there's no particular reason why only the US should claim that its laws apply globally. Why not Franco-German laws against Holocaust denial? English libel law? Saudi blasphemy law? Chinese censorship law?
Sooner or later someone's going to find themselves in a Kafkaesque situation where two global jurisdictions demand incompatible things.
That's exactly what we're already talking about here: companies are unable to obey both EU rules concerning privacy, and US laws concerning law enforcement access to data.
And that's basically why borders between internet jurisdictions are now being drawn up.
> The Court adds that legislation permitting the public authorities to have access on a generalised basis to the content of electronic communications must be regarded as compromising the essence of the fundamental right to respect for private life.
> Likewise, the Court observes that legislation not providing for any possibility for an individual to pursue legal remedies in order to have access to personal data relating to him, or to obtain the rectification or erasure of such data, compromises the essence of the fundamental right to effective judicial protection, the existence of such a possibility being inherent in the existence of the rule of law.
http://bits.blogs.nytimes.com/2014/07/31/judge-rules-that-mi...
http://arstechnica.com/gadgets/2015/09/report-google-will-co...
Unfortunately, there's little chance of normalizing the laws with international custom, since I can already see the attack ads about tax breaks for the wealthy.
De facto, it's when you take money from EU customers and/or have an official office in some EU country.
So, a non-profit that took monies from EU citizens I think would still possibly be affected, unless there's EU laws that make non-profits a different class of business subject do different laws.
The same reason that if, say, Texas introduce a law that says everyone commenting on a texan website needs to be polite and I post a comment with some name calling, suing me as someone not from Texas nor the US would not be very doable, even though I technically infringe on that law.
Note that the original point of the cookie banner law was not to ban cookies, but to inform users about it and allow users to avoid websites storing information about them. That consequence of that law is terrible and we all know that with the banners everywhere, but at no point was it "cookie are forbidden, but you can bypass it with user approval", it was "cookie are allowed but require approval".
Storing EU citizen data without respecting the data privacy directive is forbidden, period.
The issue at the core of the Schrems case is that Facebook for example is not bound to respect this, or any other fundaments of EU data protection law.
However, if you register with a website that is clearly and overtly outside your data protection jurisdiction then it is "you" who is freely providing that data. Just as you might give personal information over a transatlantic phone call.
The EU has no jurisdiction where the company is not in the EU, and cannot prevent an individual from sending their private information outside the jurisdiction if they want to.
But various of these multinationals such as Facebook are in the EU for various operational reasons and as such the EU does have jurisdiction over them.
The relevant provisions are articles 25 and 26 of the Data Protection Directive [1] and their implementations by the member states.
[1] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:...
From what I see in the ruling, it keeps stating "under the directive" (Data Protection Directive).
The current Directive, does indeed give national governments the right to decide how it's implemented. However, the new Directive (or regulation actually, meant to pass this year) will unify the directive for all countries. So I believe this "bureaucracy" issue, at least in regards to having to follow 27 different laws, will not be an issue anymore.
There might be some bureaucracy to ensure that you really count as being hosted there (e.g. possibly ensuring that the parent company cannot access said data - which would be problematic for some companies), but AFAIK (IANAL) there's no legal distinction between EU and non-EU companies in this kind of rule.
For example it could let games circumvent online gambling laws.