Yes, such rules would make companies focus on specific local market first and expand slowly. I'm not so sure this is a bad thing. As you said, it doesn't make a difference to existing big companies. Slower growth for new ones could make it more likely we end up with different competitors in different markets (fb west, vk russia, ...) instead a single winner taking it all. And if some potential ideas won't make it cause of slower growth and a some more administrative overhead, I still prefer that over some large foreign evil empire pushing its social norms onto my country.