Exposing Concerns of US Tech Giants Contemplating UK Exit
‘TIPPING POINT’
Many of these businesses are becoming increasingly frustrated.The “tipping point” for them is UK regulation, which is coming at them thick and fast. The Online Safety Bill is expected to be passed this fall. It aims to protect minors by establishing tight procedures for policing social media content, with significant financial penalties and prison time for individual internet executives who fail to comply.
One especially contentious provision is a proposal that encrypted messages, including those transmitted via WhatsApp, be read and handed over to law police by the platforms on which they are sent if there is a national security or child protection danger. The NSPCC children’s organization has classified encrypted messaging applications as the “front line” of where child abuse photographs are transmitted, but it is also regarded as an important security tool for activists, journalists, and politicians.
Currently, messaging apps with this encryption, such as WhatsApp, Proton, and Signal, cannot see the content of these messages. Both WhatsApp and Signal have vowed to exit the UK market in response to this demand.The Digital Markets Bill is also being debated in Parliament. It suggests that the UK’s competition authority select huge corporations such as Amazon and Microsoft, impose rules on them, and punish them if they do not comply.
When the Competition and Markets Authority (CMA) decided to block Microsoft’s acquisition of video game behemoth Activision Blizzard, the company responded angrily.”There’s a clear message here – the European Union is a more attractive place to start a business than the United Kingdom,” shouted CEO Brad Smith. Since then, the CMA has reopened talks with Microsoft.
This is especially troubling because the EU is implementing tight restrictions in the same line – but it is a lot larger and thus more valuable market collectively.In the United Kingdom, planned revisions to the Investigatory Powers Act, which included tech businesses obtaining Home Office clearance for new security features before global distribution, infuriated Apple to the point where it threatened to remove Facetime and iMessage from the country if they were implemented.
Clearly, the UK cannot and should not be kept hostage by US IT behemoths. However, the services they provide are used by millions of people. And, right or wrong, there is no UK-based substitute for such services.
Against this backdrop, we have Rishi Sunak, a self-proclaimed pro-tech prime minister. He is attempting to entice the lucrative artificial intelligence sector, which is also predominantly located in the United States, to establish a presence in the United Kingdom. A few of them, including Palantir, OpenAI, and Anthropic, have decided to set up shop in London.
However, others in California’s Silicon Valley believe that the goodwill is fading.”There is growing resentment in the UK and EU about the UK and EU attempting to rein in Big Tech… that is seen as less about ethical behavior and more about jealousy and tying down foreign competition,” says industry veteran Michael Malone.DeepMind co-founder Mustafa Suleyman, a British entrepreneur, has chosen to base his new startup InflectionAI in California rather than the UK.
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