U.K. Warns Tech Industry May Be Damaged Without Brexit Deal

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(Bloomberg) — Britain risks damaging crucial parts of its technology industry unless it can secure an unprecedented deal with the European Union on data exchange after Brexit, according to a government paper published Thursday.

The document made clear that Britain’s aim in this area after Brexit is for as little as possible to change. It argued that the U.K. has played a central role in the development of the EU’s data rules and proposed a cooperation model that reflects this.

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“The U.K. starts from an unprecedented point of alignment with the EU,” the document said. “In recognition of this, the U.K. wants to explore a UK-EU model for exchanging and protecting personal data, which could build on the existing adequacy model.”

So not only does Britain want to preserve the status quo after Brexit, it wants to shape the bloc’s policy and benefit from a system that delivers more security than other countries dealing with the EU have. The paper pointed out that 43 percent of the EU’s large digital companies started in the U.K.

“Any disruption in cross-border data flows would therefore be economically costly to both the U.K. and the EU,” the document said. “It is essential that we avoid regulatory uncertainty.”

This uncertainty would come if Britain had to fall back on an “adequacy agreement” with the EU, the main existing way for non-EU countries to move data in and out of the bloc. Such an accord could be unilaterally withdrawn by the EU at any time, a potential worry for Britain’s 118 billion-pound ($150 billion) technology industry.

Global tech companies including Facebook Inc., Alphabet Inc. and Snap Inc. have been expanding operations in the U.K. over the past few years. Any issues with the transfer of data between the U.K. and Europe will cause these companies unwanted headaches.

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