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Why the United Kingdom leaving the EU would infuriate the tech industry

No one in tech seems to like it.

Dan Kitwood / Getty

On Thursday, citizens of the United Kingdom will vote on whether the country will “remain” in or “leave” the European Union. Because political movements now bend towards portmanteaus, we are calling this the Brexit (for British exit), or perhaps more accurately, #Brexit.

Popular opinion appears to be pretty much evenly split as the country prepares to vote, but tech companies hate the idea of the U.K. leaving the European Union.

A March survey of tech industry people in London, the European capital of tech, showed that almost 90 percent of those polled opposed Britain leaving the EU. What makes the tech crowd so adamant? A few things, not all of which are tech-industry-specific.

Broadly, economists and experts agree that a U.K. vote to leave the European Union would have severe consequences for both the country and the continent. It would weaken policy reforms that made air travel cheaper, reduced the cost of health care and allowed EU nationals to study at universities across the union.

James Waterworth, the Europe VP of the tech industry trade group Computer and Communications Industry Association (CCIA), told Recode in a Skype interview the outcome for tech firms could be dire.

“Britain is the leading light for open liberal markets, and if it leaves, there won't be many large countries left preaching that kind of thing,” Waterworth said. “The European market would potentially become a much more hostile place.”

European laws designed to create a “digital single market” across the EU could take a particularly big hit should the U.K. leave. For example, data sharing “safe harbor” agreements across EU countries — like the EU-United States one that was invalidated earlier this year — might not apply to the U.K.

British intelligence services have much more expansive surveillance powers than their American counterparts. But because the U.K. is part of the EU, European user data can be shared with British companies in spite of European concerns over privacy.

Were the U.K. to leave, the governments would almost certainly forge a new data sharing agreement, but Waterworth said “it’s possible the courts would come to the same conclusion as they did with the U.S.” and would kill any user data deal the U.K. makes with the EU.

Additionally, the absence of the U.K. might impact the balance of power within the European parliament in ways that negatively affect tech companies.

“The block of more market-oriented countries including the Scandinavians and the Dutch will shrink from 35 percent to 20 percent,” Waterworth added. “All future rules that affect the tech industry are much more likely to be more restrictive, less accommodating.”

Polina Montano, COO and co-founder of the Accel-backed European hiring startup Job Today, has a slightly more measured take.

She says that while Brexit would make it difficult to “hire the best international talent to our London office ... as long as startups are willing to adjust to the new circumstances, there’s no reason why they shouldn’t continue to thrive.”

If the referendum is so nakedly bad and widely derided by experts — both inside and out of the tech industry — how did it ever come to happen at all?

The consensus seems to be that it’s because of anti-immigrant misinformation spread by the right-wing British press and cynical politicians with an EU-shaped axe to grind.

I asked Waterworth if he could think of any major business figure in the U.K. who was in support of Brexit. It took a minute but he thought of one.

“Sir James Dyson.”


The vacuum guy. But really, he seems to be it.”

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