Italian laws do not apply to Google USA.
Companies can always choose to ignore a specific nation’s laws[1], they don’t still get access to that nations markets. At the borders the nation state is the one with the guns and firewalls
[1] unless you piss off a nation that can project global power, lol if you piss off China or America
Chinese and American police forces both operate abroad and like to flex their power. The NYPD was in a similar situation post 9/11 when they started trying to police nearby states and when they sent operatives to other countries even against their own federal government [1].
Russias also sent operatives overseas in some fairly public assassinations. It’s not really surprising that China does this, it appears to be the default operating procedure of powerful countries
[1] http://america.aljazeera.com/watch/shows/the-stream/the-stre...
Google, Facebook etc. being blocked in China.
etc.
So the existence of Google USA makes Google Italia operation illegal.
Either US company get's the data from the Italian one, making the Italian operation illegal in Italy
Or
The US company doesn't get the data from the Italian one (despite ownership), making the US company illegal in the US.
I don't think anyone is under the illusion that the latter option is chosen when push comes to shove.