Every piece of the Internet, every server, computer, router, and switch, is in one country or another (barring the few floating out in international waters), and every single one of them is subject to the law in the country where it is. And every individual or business entity operating them is subject to the laws in the countries they are or operate in. This has always been this way.
The Internet is not any different than any other communication medium. We don't perceive a phone call as being something above or outside the law of the nation it takes place in. We don't see mail as being above or outside the law of the nations it traverses. The Internet is just another medium of communication between people and businesses like any other.