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Can’t companies migrate away from the US in that case?

Sure it’s unthinkable, but if they don’t have any presence in the states you can’t sue a foreign company for doing business on the internet?

What would the US’s recourse be? Start doing a Great Firewall?

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I suppose you're right. US would come to be known as anti-user-generated-content, as Australia came to be known as a place where the gov can compel companies to make backdoors. Companies would migrate their workforce, servers, etc.. Maybe not the death of the global internet, but not good for the US.

"Australian tech companies have said that the bill could hurt their business overseas, because customers would doubt their promises to protect encrypted data." https://www.nytimes.com/2018/12/06/world/australia/encryptio...

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