Eric Schmidt, the chairman of Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) said it is unlikely for Google to change its operations in Europe after the Brexit referendum.
Last week, the British people voted in favor of Britain leaving the European Union (EU), which led to market turmoil and uncertainties for U.S. technology companies. Observers in the industry suggested that the Brexit broke the EU, which was slowly becoming a single digital market. There is a possibility that the control of competition, data privacy and protection, tax, and recruiting in the region will be divided into two or even.
In April, the EU approved the new General Data Protection Regulation (GDPR), which is scheduled to take effect in May 2018. The law will no longer apply to Britain once it leaves the EU.
Schmidt is concerned of more barriers in the market
During a press conference in Paris on Thursday, Schmidt said, “I think it unlikely that Google will change our allocation based on this [referring to the Brexit]. You never know, but it would be hard for me to imagine we’d make much of a change.”
He also stated that the EU should ensure would not create barriers that are harmful to entrepreneurs and technology companies. According to him, “I’m always concerned when people talk about more barriers. Europe has suffered from splintering of the markets and I don’t want anything to splinter it further.”
Tech companies and regulators in Europe have been calling for shared rules to regulate the digital markets in the region.
“No matter how politics work out, I hope we retain as common a platform as possible for digital. I hope there will be more harmonization, added Schmidt.
Eduardo Ustaran, a lawyer at Hogan Lovells LLP in London specializing in privacy law, recently commented, “They want one law, one framework, one consistent approach. The lack of harmonization makes more cost than regulation itself.”
Tech companies will bear the consequences of Brexit
Separately, Box CEO Aaron Levie told CNBC that technology companies will bear the consequences of a Brexit citing the reason that they will be forced to serve an increasingly fragment set of customers worldwide.
Levie said, “This is a mismatch between the potential of the internet and how today’s laws work — but there is no obvious solution in any foreseeable time period.”
He shared a similar concern with Schmidt that creating more barriers or further separating economies undermine the power and promise of technology.
“Philosophically, you are going to see a lot of resistance or disappointment from tech companies, simply because the very nature of technology is that we generally are advocating for more open, more global societies. Our job is just to adapt to the realities of what people are voting on and try and move forward,” said Levie
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