Britain’s Exit Could Make Europe Less Friendly to U.S. Tech

Silicon Valley's biggest businesses could face tougher regulations following Britain's decision to withdraw from the European Union, and some might have to leave London to attract the best employees.

Many U.S. tech companies now count on Europe for a quarter or more of their business. Beyond facing a financial downturn as the pound's value erodes, these companies might find Europe a more challenging environment in which to do business.

It could take a year or two before the picture becomes clear. For now, what's certain is the U.K.'s exit will be complex and unprecedented, with repercussions crossing the Atlantic and reaching all the way to the U.S. West Coast.

Meanwhile, U.K. tech companies might have to leave the country to follow their customers and funding sources.

Here are some ways U.S. and U.K. tech companies might be affected:

Silicon Valley Could Lose a Moderating Voice

In recent years, the EU's chief antitrust cop has accused Google of thwarting competition by using its dominant search engine to drive traffic to its own services. Apple and other U.S. companies face allegations they haven't been paying their fair share of taxes in certain European countries. And the EU is adopting stricter rules limiting how much personal information online ad companies such as Google and Facebook can collect from Europeans.

While those companies declined or didn't respond to requests for comment, industry groups say that U.S. tech companies could face even tougher rules without Britain serving as a moderating counterbalance against Germany, France and other countries that prefer even stricter oversight.

For example, France has pushed Google to meet a more expansive interpretation of an EU court ruling that requires internet companies to recognize an individual's "right to be forgotten." Under the ruling and subsequent guidance from EU regulators, Google has removed search results that link to online information about individuals who...

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