That does seem to be the intention, to hold companies liable, I just dont see how that would possibly work. Similar situations have happened with DMCA copyright stuff. Some foreign pirate sites were fined by the American government, and the sites literally told them to fuck off.

And what if some countries create laws that state you cannot recklessly gather users' personal information? Who do you obey? Do you pay a fine no matter what? Are you banned in one country? How would that be enforced?

Not only do I fundamentally disagree with what they're trying to do, it simply doesn't make sense in the first place, nor does their implementation.