Thousands of online retailers who use Amazon to sell their products could find their businesses switched off in the event of a no-deal Brexit.
Sole traders who use platforms such as Amazon and Google to sell online could find themselves blocked because the EU would not recognise UK data protection standards in the event of no-deal.
Although the UK has already said it would accept EU data compliance in the event of a no-deal Brexit, the EU has made no such pledge, leaving online retailers stranded.
Both Amazon and Google host huge amounts of data from giant centres based in Europe.
It could take years for the EU to sign off a data compliance agreement with an independent UK.
Read: third party platforms – is it worth selling through the likes of eBay and Amazon?
“Data flow is so ubiquitous in our day-to-day lives that if it stops, [we don’t know exactly what will happen], Claire Edwards, a partner at law firm Pinsent Masons told the Sunday Times.
The potential aftershocks of a no-deal Brexit on October 31 have been laid bare in confidential details of Operation Yellowhammer, the government’s no-deal contingency planning for a no deal departure, which were leaked to the newspaper.
Warnings include three months of chaos at ports, fuel and food shortages, nationwide unrest and a hard border on the island of Ireland.
Meanwhile, business groups have conceded many companies are ill-prepared for no deal.
“In general, large businesses that work across sectors are likely to have better developed counting [sic] plans than small and medium-size businesses,” the Operation Yellowhammer document stated. “Business readiness will be compounded by seasonal effects and factors such as warehouse availability.”
The government says that the Operation Yellowhammer document – which was allegedly leaked by former Chancellor Philip Hammond – is outdated and does not represent the current level of preparedness since Boris Johnson took over as prime minister.
But representatives of the UK’s business lobby groups told the Financial Times that the leaked document’s assessment of business preparedness for a no-deal Brexit was correct, especially for smaller companies.
A CBI spokesperson said businesses “remain hampered by unclear advice, timelines and costs”, while the Institute of Directors’ Allie Renison said many smaller firms were unconvinced such planning was necessary
Edwin Morgan, interim director-general of the IoD, said businesses across the economy were “seriously underprepared” for no deal, with smaller businesses especially facing “unknown unknowns”.
Morgan added that the government “still doesn’t talk the language of smaller businesses”. “There’s been no financial support and little accessible information,” he said.
Mike Cherry, chairman of the Federation of Small Businesses, told the FT that smaller firms mostly did not have the resources to plan for no-deal.
“The ongoing political uncertainty has meant it’s impossible for them to invest, expand and hire when we don’t know what the future holds,” he said.
KPMG urges SMEs to speak to banks before shock of no-deal Brexit