Brexit has fundamentally changed the legal framework governing digital services between the EU and the UK. Until 2021, both sides followed the same set of rules—the General Data Protection Regulation (GDPR). Now, the UK data protection regime (GDPR) is developing in parallel and gradually diverging from the European one.
This creates challenges for companies serving clients on both sides of the English Channel: from IT outsourcing and cloud solutions to financial services and online platforms. Below is a detailed analysis of the key changes affecting businesses in 2025.
Data Transfer: What’s Changed Since Brexit
After the UK left the EU, the country lost its automatic status as a “haven jurisdiction.” Formally, free data transfer is possible thanks to the European Commission’s adequacy decision (adopted in 2021), but this may be revised if British law deviates from the GDPR.
Digital services companies are taking this into account. While a standard contract was sufficient before Brexit, additional risk assessments (Transfer Risk Assessments) and updated Standard Contractual Clauses (SCCs) are now required. This is especially true for services that handle sensitive data, such as fintech, healthcare, and e-commerce.
This also presents interesting nuances in industries where data is processed in two jurisdictions. For example, British betting sites operating in Italy — so-called local bookmakers — must comply with both the EU GDPR and the UK GDPR, as well as explain to users where and how their data is processed. This increases legal costs and complicates the technical infrastructure for data storage.
How Brexit Impacts Personalization Algorithms and Digital Analytics
After Brexit, companies that use content personalization, advertising algorithms, and user behavior analytics faced new restrictions. While data tracking in the EU and UK was previously regulated by a single set of rules, since 2021, two different data processing models have had to be adapted. This affects advertising networks, e-commerce, mobile apps, content platforms, and any services that use profiling.
Firstly
The operation of cookie systems has changed. The EU has ePrivacy requirements, which have tightened consent rules. In the UK, a more flexible model is gradually being discussed, allowing for simplified consent mechanisms for low-risk tracking scripts. This leads to data fragmentation: some segments are formed under EU rules, others under the UK GDPR.
Secondly
Brexit has complicated the use of third-party analytics tools such as Google Analytics, HubSpot, Mixpanel, and Amplitude. Some features are restricted in the EU (for example, user IDs and IP data), while the UK has simplified exemptions. Companies are forced to create dual analytics configurations to avoid violations. The Data Protection Network estimates that this increases the cost of implementing analytics by 12-18%.
Thirdly
Personalized advertising algorithms based on user behavior now require two different consent models. In the EU, it’s a strict opt-in model, while in the UK, a more lenient model is permitted. As a result, digital platforms are forced to build separate flows for consent banners, which impacts conversion: according to Statista, the average drop in banner conversions in the EU due to strict rules is 20-30%.
UK GDPR: Where is the British Model Heading?
After Brexit, the UK announced its intention to make its data protection regime more flexible. A Data Protection and Digital Information Bill (DPDI Bill) was discussed in 2023–2024, proposing simplification for small and medium-sized businesses, a reduction in reporting scope, and the introduction of alternative risk assessment mechanisms.
However, the parallel development of the two systems is leading to a growing divergence. While the EU is strengthening data processing controls (the Digital Services Act and the DMA), the UK is focusing on reducing bureaucracy. This means that by 2025, companies operating in both markets will have to develop dual compliance procedures, including different notification forms, DPIA assessments, and log retention rules.
This adds costs to businesses: according to the UK ICO and PwC, the average company will spend 15–25% more time and resources on data management after Brexit than before 2021.
Restrictions for Digital Platforms and Services
Digital platforms and SaaS providers are facing several new requirements:
- the need to clearly indicate where data is stored and which jurisdiction protects it;
- the obligation to appoint a representative in the EU if a company manages the data of EU residents;
- strengthened verification of third countries hosting cloud storage;
- new rules for cookie banners and tracking in the EU.
Furthermore, access to certain European certification systems has changed. For example, British providers can no longer automatically use European conformity markings without additional procedures. Difficulties have also affected cloud services: since 2021, some British data centers are no longer eligible for projects that require 100% data hosting in the EU.
GDPR Gap: Risks and Impact on Business
The gap between the GDPR and the UK GDPR creates three key risks:
- An adequacy decision may be overturned if the UK amendments are found to be incompatible with the GDPR.
- Different encryption schemes, retention policies, and procedures for responding to data subject requests must be implemented.
- Additional DPO audits, two versions of privacy notices, and different DPIAs all increase the burden on IT and legal teams.
This is especially significant for small businesses: companies that previously operated without a dedicated data protection officer are now forced to either hire employees or use outsourced services.
What digital companies should do in 2026
To minimize risks, businesses in the UK should adhere to five practices:
- Regularly audit data processing for both jurisdictions.
- Use the new-style SCC.
- Separate EU and UK databases.
- Implement local data centers or obtain verified guarantees from cloud providers.
- Monitor changes to the DPDI Bill and ICO recommendations.
Companies that have implemented dual privacy policies and separate data streams for UK and EU users have seen a 40-60% reduction in the risk of fines compared to those operating under a single standard.