What Brexit means for app users, developers and marketers

Insights Jul 05, 2016

Like most technology companies with operations in the UK, here at Jampp we were quite shocked about the other week’s referendum results. Having the same rules and being able to trade and hire freely from 28 different countries in Europe is a major advantage for most tech companies. On a more philosophical note, Jampp is a truly global company (in our team we have Argentines, Brazilians, Italians, Ukranians, Americans, Poles, French, Germans, Moroccans and a dog) and as such we celebrate diversity and bringing people closer. We think Brexit is a step “away” from that unfortunately but now that it’s done, we must accept the result and make the best out of the outcome.

While the world is still trying to figure out what the impact of Brexit will be on the economy (and pretty much everything else!) we thought it would be a good idea (because nobody thought of doing a “what does Brexit mean for x industry” yet) to put it in the context of mobile apps and mobile app marketing.

So here go a few things to take into account…

One thing that can’t be denied is that the European Union has done great things for consumers’ rights. These are some of the things the UK had to follow for being part of the EU and will have to decide if it keeps or not:

Mobile payments

The SEPA Regulation (EC 260/2012), effective since 2013, is based on the premise that there should be no distinction between cross-border and domestic electronic retail payments in euro across the EU. The SEPA project covers the key retail payment instruments: credit transfers, direct debits and payment cards, aiming to create the reality of a European Single Market for retail payments. This means that cross-European payments inside e-commerce are straightforward and very low cost. That may change.

Shipping costs

Aside from the fact that there are no customs duties to be paid when buying goods coming from within the European Union, on 25 May 2016 the Commission adopted a proposal for a Regulation on cross-border parcel delivery services, as part of a package of measures to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU. The Regulation aims to lower shipping/ delivery costs by introducing greater tariff transparency and thus encouraging peer competition. To this end, the Commission will publish public listed prices for universal service providers and give national postal regulators the data they need to monitor cross-border markets and check the affordability and cost-orientation of prices. Shipping atoms between European countries may become more expensive and complicated if the UK leaves the single market.

In-app purchases

The European Commission, primarily targeted Apple and Google, ordering both companies to institute changes to prevent children from running up huge bills while playing games on phones and tablets. Since then, “free apps” with in-app purchases are no longer labeled as “free” , they now clearly state “Offers In-App Purchases”. This is unlikely to be rolled back as it was implemented everywhere.

Roaming

This is a big one, there is nothing like being able to travel within Europe and not having to worry about data charges while using Google Maps, Uber and (yes) Clash of Clans. Roaming charges between European countries have been steadily decreasing thanks to the European Commission, the latest decrease happened only a few months ago in April 2016 and they are planned to be removed entirely by June 2017. It’s very unclear what will happen with this, but it will affect both consumers and app developers, as their users will become a lot more careful about where to use their apps and for how long.

Additionally, to increase consumer trust in e-commerce, a proposed revision of the Consumer Protection Cooperation Regulation was going to allow national authorities to:

  • check if websites geo-block consumers or offer after-sales conditions not respecting EU rules (e.g. withdrawal rights)
  • order the immediate take-down of websites hosting scams
  • request information from domain registrars and banks to detect the identity of the responsible trader

The above are all things that made e-commerce safer in between the UK and Europe

Data protection

The UK will need to decide whether they comply with the General Data Protection Regulation (GDPR) which is scheduled to take effect in May 2018. Its objective is to strengthen and unify data protection for individuals within the European Union (EU). It also addresses export of personal data outside the EU. The Commission’s primary objectives of the GDPR are to give citizens back the control of their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU.

Less choice

A lot of UK companies operate in Europe (and vice versa) because it’s easy to do so (Zalando, JustEat, Transferwise and Net a Porter just to name a few). You don’t need to set up local operations, regulation is the same, there are no payment issues, no tax implications, etc. That may change if things get more complicated/expensive for companies in the UK operating across Europe. So there may be less choice of apps to buy from.

Venture capital

Access to funding and credit may go through some changes, specially among startups in the tech industry. The European Investment Fund (EIF) is the largest investor in UK venture capital firms — whether this funding stream will remain in place, and for how long, is a major question mark.

Adtech

Advertising will become more expensive for UK companies. It’s not uncommon for the dollar to be the trading currency within RTB auctions or have deals structured on the back of a dollar amount. This may be translated to GBP but yield is often measured as an overall dollar figure.

Also, according to Marketing Tech News, similar to what happened in the 2008 crash, there will now be an increased focus on accountability and transparency, which is a particularly (and to be honest, the only) good thing at this time in light of the ANA rebate investigation controversy and the ongoing fight digital advertising faces against the “four horsemen” of fraud, viewability, brand safety and ad blocking.

The next few months (years?) will be filled of uncertainty, which is really the worse problem at the moment as it’s stalling many decisions (investments, hires, company and app launches, etc.).

A silver lining? Well, it may be easier for “remainers” to find their other halfs between the 48% thanks to this new dating app.

What is your take on Brexit and the impact on apps? Are there any other major changes you think the app ecosystem will undergo?