I finally heard back from Google yesterday about the possible Gmail ban in Germany. According to my source, the whole thing was a misunderstanding spawned from a misinterpreted quote from a theoretical discussion between Google’s global privacy people and the press. Peter Fleischer, from the Global Privacy Counsel went on the record with the following:
It's hardly surprising to hear Google take this stance, but it's still good to know that no one is in a rush to make the hypothetical ban legally binding. I have to admit though, a couple of alarms did go off when I'd heard the initial talk of the ban--especially since none of the numerous other email providers made so much as a peep. Now that you’ve heard the truth, make sure to pass it on. Purplemonkeydishwasher.