By Charlie Conchie
Microsoft and Revolut’s high-profile run-ins with City regulators do not signal an underlying hostility to tech and instead show regulators in the UK will not “roll over and play dead”, a top London tech chief has said.
City regulators have faced a barrage of criticism in recent weeks from executives at the two firms.
Microsoft’s chair Brad Smith claimed the Competition and Markets Authority’s move to block its merger with Activision Blizzard, on the grounds that it would hamper competition in the nascent cloud gaming market, “shake[s] the confidence among the business community in the UK”.
While Revolut’s founder Nikolay Storonsky has again hit out at the Prudential Regulation Authority and Financial Conduct Authority over its failure to win a banking licence, claiming bureaucracy and the slow pace of movement would force it to expand overseas.
The moves have triggered fears that regulators are damaging the UK’s status as a tech hub.
But industry grandee Russ Shaw, the chief of Tech London Advocates, told City A.M. it showed the strength of the UK’s regulatory system.
“I think this is a good signal that our regulators are not just going to roll over and play dead, but they’re going to take their job seriously and scrutinise,” Shaw said.
“If they don’t like something, whether it’s the financials or the way a big tech player is behaving, I think it’s important that they speak out,” he said.
Shaw added that while the two cases were unique they showed regulators were intent on “getting companies to behave sensibly and responsibly, and [to] have some accountability”.
Revolut, once Britain’s most valuable private company at $33bn, has faced a two year battle with regulators to win a banking licence. Then-finance chief Mikko Salovaara said in March the licence was “imminent” but the Telegraph reported last week that the PRA was due to reject its application due to fears over its accounts.
Storonsky fired a barrage of criticism at the government and regulators for a lack of support in its growth plans in a recent interview.
“US tech champions are so supported by the government: all the lobbyists, politicians, governors, they always promote business, business, business and it is completely the opposite in the UK,” he told The Times. “We have experienced a slowing down. You never know what needs to be done here.”
The firm is reportedly looking to bolster its presence in the EU as a result of the regulatory run-in, though it has insisted “London is our home”.
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