UK locks horns with WhatsApp over threat to break encryption
politico.eu
politico.eu
The logical course of action would be for Whatsapp to remove all assets they have in the UK from the UK (so there is nothing the UK government can hold hostage to extract compliance) and then disregard UK law entirely. If the UK wants to block Whatsapp or order Google/Apple to make it unavailable in the UK they could do so, but they could then educate people on how to sideload it on Android devices (and support continued antitrust action against Apple for the appstore, etc.). If the UK government tries to block Whatsapp at the network level, Whatsapp could enhance their application to automatically work around this using Tor-style, Tor Bridge-style/obfsproxy/etc. or similar techniques.