Which would be really bad for business, because there's a surprising amount of stuff hosted in the EU.

Broadly speaking, if your primary markets are not America or Asia and you are the type of company that buys racks of space in datacenters without blinking, western EU is where you'll probably be.

The main factors are servicing, bandwidth and reliability.

For example, many trans-national African projects are hosted in the EU because it's simply cheaper to set up infrastructure there, because you're piggybacking on the infrastructure that's already there (long-term shared costs). Once in place, it's easier to service because you outsource service contracts on things like hardware to the vendor, who can give you a decent quote because ... they have a servicing system in place.

Power comes from the power grids that are in place, and that's very reliable. Bandwidth comes from the bandwidth structure that's .. you got it .. already in place and being upgraded all the time.

Now try and set up a load of servicable hardware in a reliable datacenter (bandwidth and power-wise) in Africa. Or Eastern Europe. Or the Middle-East. It's doable, but the price tag goes up, up, up. To service your account your vendor will have to invest in local infrastructure, hire competent servicing personnel near site, find a way to deliver hardware components in a timely manner without access to a general depot, etc. And because you're the only one requesting this you'll have to pay for it all.

You could try and move into the Russian Federation, but the operational costs there are, ah, unpredictable. Also, the Russian networks do not extend well beyond the metropolitan areas (trans-national traffic is also a work in progress).

I could go on, but my point is that the western EU hosts and accounts for a lot of traffic.

I sincerely doubt this Directive will have much impact. There are just too many interests involved.