Yesterday, in what has been termed the "Brexit," the residents of the United Kingdom voted to leave the European Union. While the vote is technically non-binding, the likelihood is, of course, that the elected government will follow through on the desire of its constituents, formally notify the EU of the UK's desire to leave, and begin negotiating the terms of the exit.

How will the British exit from the EU impact technology companies? Here are some potential areas:

1. Data protection and privacy laws. It is likely that the rules governing how businesses must handle data related to citizens of the UK and businesses located within the UK may change - as after an exit, EU laws would not apply, and even newly created UK laws will likely not be identical to those of the EU. For practical reasons the UK, of course, may try to establish laws mirroring those of the EU, but, its voters and elected officials may have different ideas than their counterparts in other parts of Europe, and, as such, the government's ability to do so is hardly guaranteed. Furthermore, the EU itself - angry about the British exit - may not wish to offer the same data protections to British citizens as it does to those of its own members. So, computer systems around the world may have to be modified to address new rules for data storage, backup, privacy, and processing. Furthermore, because France and Germany have been far more aggressive in targeting American firms under EU privacy and related laws than have the British, a UK exit from the EU may remove a tempering factor and lead to even more aggressive pursuit of American firms for perceived violations of EU privacy laws.

2. The "Right to be Forgotten." The EU Right to Be Forgotten - which grants citizens of the EU the ability to have themselves removed from search results that are "inadequate, irrelevant, or no longer relevant, or excessive in relation to the purposes for which they were processed" -- would not apply to citizens of the UK once the UK leaves the EU. Because this right was established by an EU court ruling, it may take some time for such a case to be tried in the UK. Of course, Parliament could pass a law granting the right - but, if a search engine provider challenged the new law there is no guarantee that a UK court would rule the same way as did the EU Court of Justice.

3. The UK could shrink, which would dramatically impact technology businesses. The residents of Scotland, for example, voted overwhelmingly to remain in the EU. If the folks there determine that EU membership is more valuable than remaining part of the UK, they may choose to leave the UK altogether. This would obviously dramatically impact any business with offices in, or doing business with, Scotland. It could also lead to data laws changing in Scotland - from those of the EU to those of the UK and back to those of the EU. Time will tell.

4. USA-EU Privacy Rules. The EU and the USA are currently negotiating a privacy policy framework ("Privacy Shield") for transfers of personal data between the two regions. Obviously if the UK is no longer a party to that agreement, either additional agreements will be needed, or a new party will be introduced into the existing negotiations - likely complicating matters, extending the timeframe of getting an actual, working framework into place, and creating risks to both USA and UK businesses of  legal issues until an agreement is in place.

5. Technical workers may have less mobility. Citizens of one country in the EU can work and live in other countries within the region. Unless the UK and EU agree to preserve such an arrangement without the UK remaining part of the EU (something that the EU might be averse to doing in order to discourage other countries from leaving the EU), firms in both regions will lose access to some workers, and be forced to endure a more tedious process when hiring others. Some existing workers may even be forced to leave their current jobs. Travel between the EU and UK might also take more time due to the need to check visas, etc.

6. Trade rules. New import/export laws might go into place both between the EU and the UK, as well as between the UK and other nations. Any changes in this regard will obviously impact businesses worldwide both in terms of practice, and vis-a-vis forcing changes to be made to computer systems.

7. Wireless communications. The EU has been working on standardizing wireless communications throughout Europe and on ensuring service without roaming fees throughout the EU. Obviously, if the UK is no longer part of the EU there is no guarantee that any progress in this regard will apply in the UK - although it is possible that the UK and EU will continue to cooperate on such matters due to the obvious mutual benefit of continuing such arrangements.

Published on: Jun 24, 2016
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