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What Brexit means for IT businesses

Tamlin Magee | March 15, 2016
Brexit means data headaches and business uncertainty, say IT pros and lawyers

"Anything that makes bringing the skills needed into the country will further muck up Cameron's much-vaunted claim that we lead Europe in the digital world."

Brexit for business: Regulation

Iain Monaghan, partner at international law firm Pinsent Masons, thinks the impact of a decision to remain or leave is most likely to be felt by the IT sector in two areas: "The attractiveness of the UK as a centre for tech businesses and the effect of a decision to leave on the regulatory environment."

"I don't believe our colleagues in the EU would refuse to enter negotiations with the UK on trade," Monaghan explains. "And on whatever arrangement would be put in place to cover data protection and privacy, once we ceased to be subscribers to the General Data Protection Regulation (GDPR)."

The GDPR is a regulation that is expected to be enforced by 2018. Its purpose is to strengthen data protection for individuals across all EU member states - and crucially for businesses, regulates exporting personal data outside the EU.

In the case of a Brexit, agreements would need to be formed between British firms operating in Europe and with European companies.

Nigel Beighton, who was VP of technology at web hosting firm Rackspace, warned in 2015 that businesses urgently need to think about how they would house their data in foreign countries.

"Within the EU, differences in legislation and uncertainty can form imposing barriers; outside of the EU, these are exacerbated," he said at the time. 

"We should be looking at measures to integrate and normalise processes, rather than obfuscate as a British exit from the union almost certainly would."

Careful thought will need to be given to achieve the ongoing free flow of data between the UK and the EU, says Mark Taylor, partner and data protection expert at Osborne Clarke.

"Ultimately, it is likely that the UK's data protection laws would still need aligning with GDPR in some way," Taylor says.

According to VMware's chief technologist EMEA for vCloud Air, Richard Munro, a UK exit could spell stricter, more independent data laws that businesses have to adhere to - including an effective requirement to keep UK data on UK soil.

In such an instance, businesses would have to conduct an audit of their data to understand exactly where everything sits.

But recent research from VMware claimed the majority of UK organisations cannot say with confidence where their data is stored. Only 10 percent of those surveyed were in the position to bring that data back to UK soil if needed.

"Organisations will need to poll their cloud suppliers to check exactly where their data may be stored, and that if it is the UK, that the provider can guarantee it stays there," says Munro.

 

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