New UK Data Laws Have Companies Moving Overseas


Dubbed a “snooper’s charter,” the UK is about to usher in a new era of data management—and what some are calling a big brother strategy. The British government has decided to allow more communication surveillance, according to industry experts, and already it has some businesses jumping across the pond. Eris Industries is one of them, and the CEO Preston Byrne says the new bill almost surely has a “backdoor loophole” that’s going to let government spy on data without the company being the wiser. Eris is a creator of encryption software, and has already moved the bulk of their business to the US.

According to Byrne, “This legislation, if passed, is likely to prevent our technology’s use in myriad industrial applications, including financial services, which need reliable, open-source cryptography desperately if they are going to stay competitive in a digital age.” The other business that has already confirmed plans to leave the UK is, a social networking platform that has always been committed to not gathering user data. and the new law simply don’t mix, and there’s no way the platform could keep its promise and British address.

Blurred Lines

Initially, the bill was designed for telecomm businesses, but given the language involved it could actually be “used” on any business or person who uses distributed networks to communicate. Skype is a prime example. Ultimately, the bill could be applied to financial services companies, app developers and more. For years, the Conservatives have been angling to give security providers and the police more power over communications, but they were stopped by the Liberal Democrats. Now that the Conservatives have ruling power, the laws are slowly shifting.

The bill, as it exists today, delves deeper than the original proposals and boasts details about accessing encrypted data. The co-founder of web host UKFast, Lawrence Jones, says that the bill is going to retard tech growth and kill innovation. Already, Jones has noted that his company is losing business because clients are afraid of the government getting their information. “We have been able to keep British data on British soil…we have a system that works. Never mind using a sledgehammer to crack a nut, this is using a JCB to crack a nut. It is wrong and un-British,” he says, and he’s also unsure how long they’ll be able to stay above water in the UK.

Burdening Small Businesses

The new law requires companies to retain data for one year, which will mean UKFast will need to build two more data centers to the tune of over $50 million. According to the UK government, the bill will cost businesses over $2 billion in the next decade, but that estimate hasn’t been updated in quite awhile. Already, the Open Rights Group is petitioning against the bill, backed by many in the tech industry, and more than 3,000 signatures have been gathered.

The Executive Director of the Group, Jim Killock, says, “If businesses feel that they will be negatively affected by the ‘snoopers’ charter,’ they may reduce their UK operations or limit investment in UK companies. This will undermine the Conservatives’ ambition to be the political party that supports businesses.” However, British agencies maintain that they “fully support” the financial industry’s commitment to safeguard clients from fraud. However, “This should not stop our police and security services from obtaining communications data in certain, limited circumstances, to protect the public and ensure national security. This information helps to disrupt terrorist plots, smash criminal networks and keep us safe, and it is a government priority to ensure our legislation is updated to deal with changing threats and evolving technologies.”

While the government has said the bill will be “informed” via recommendations from the Independent Reviewer of Terrorism Legislation, no further details have been published.


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Drew Hendricks

Writer at Hostt
Drew is a content manager at hostt. He has been a blogger for years and currently writes for Forbes, Inc, Entrepreneur and several other sites.

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