Tech spats show UK firms will be held to account

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”.

Meanwhile, Revolut’s founder Nikolay Storonsky (pictured) has again hit out at the Prudential Regulation Authority (PRA) 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.

“We have experienced a slowing down. You never know what needs to be done here,” Storonsky told The Times.

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 after leaving the European Union.

“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,” be well received in City circles, however, after a gloomy period in which City grandees have fretted over the decline in status of the UK on the international stage post-Brexit as a number of firms ditch the capital in favour of New York.

Shaw said. He 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, has faced a two-year battle 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. The firm is now looking to bolster its presence in the EU as a result of the regulatory run-in, though it has insisted “London is our home”.

Lazard has also faced a tough period, in which it has been rocked by the slump in dealmaking. The firm was recently forced to lay off 10 per cent of staff globally, about 340 jobs, to contain its costs amid the chill in deals.

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