Moscow Instructs American Tech Businesses To Establish Operations In Russia

Published on 13 Dec 2021

Russia has asked that 13 international technology firms, most of which are based in the United States, establish an official presence on Russian land by the end of 2021 or face potential limitations or outright bans.

The demand, issued late Monday by Russia's national communications regulator, Roskomnadzor, provided scant information about what the businesses were expected to do and targeted some corporations that already had operations in Russia.

Since July 1, foreign social media firms with far more than 500,000 daily active users have been required to establish offices in Russia under a new rule. For the first time, the firms are identified in the list issued on Monday.

It includes Facebook (FB.O), Alphabet's Google (GOOGL.O), Twitter (WTR.N), TikTok, as well as messaging service Telegram, which Russia penalized earlier this year for failing to erase information it deemed unlawful.

Apple (AAPL.O), which Russia has accused of abusing its market dominance in mobile apps, was also included on the list. None of those firms returned messages seeking comment.

According to Roskomnadzor, businesses that breach the law may face limits on advertising, data collecting, and money transfer, as well as outright bans.

See also: How Danish media companies are taking on Big-Tech together

Kremlin Containment

Russia has taken measures this year to promote and support its domestic technology industry over Silicon Valley alternative solutions, suggesting taxation on foreign-owned digital solutions, tax breaks for domestic IT firms, and considering Russian software to be available on mobile phones, computer systems, and other devices purchased in Russia.

The initiative does indeed have a political component, which opponents describe as an effort by the Russian government to tighten their grip on the internet, which they claim threatens to suffocate individual and business freedom.

Among these measures are recurrent penalties for prohibited material and requirements that Russian user information be maintained on Russian servers.

Authorities have previously objected to political rivals of the Kremlin utilizing foreign social media networks to organize allegedly unlawful rallies and promote politically motivated probes into suspected corruption.

Inadequate Clarity

However, the extent to which corporations need representation in Russia is unknown, according to Karen Kazaryan, director of the analytical company Internet Research Institute.

"There is no explanation in the statute, no definition of the appropriate legal form of representation for the organization," Kazaryan mentioned to Reuters on Tuesday. When pressed for clarification, Roskomnadzor pointed Reuters to its statements.

Along with having a presence in Russia, enterprises must register on the regulator's webpage and provide a feedback form for communicating with Russian customers, Roskomnadzor stated. "Foreign organizations must restrict access to material that breaches Russian law," Roskomnadzor said without offering any specifics.


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