Russia plans tougher sanctions for tech companies who break the rules – Sources :: Kenya

MOSCOW – Russia plans to impose tougher fines on technology companies that do not comply with Russian laws, sources close to the project said, highlighting the stakes in the Kremlin's struggle with global technology giants such as Facebook and Google.

In the last five years, Russia has adopted stricter internet laws that require search engines to delete certain search results, email services to share encryption keys with security services and social networks to store the personal data of Russian users on servers in the country.

READ ALSO:

The regulator in the new push to master the technology companies

The proposed tougher sanctions are contained in a consultation paper prepared by the administration of President Vladimir Putin and sent to industry stakeholders for comment, according to three sources close to the draft document.

At the moment, the only tools available to Russia to enforce its data rules are fines generally only a few thousand dollars or the blocking of online services incriminated, which poses many problems techniques.

The proposal is to amend the legislation so that a company not complying with the rules faces a fine of 1% of its annual turnover in Russia, according to sources and a copy of the document consulted by Reuters.

The Kremlin did not respond to a request for comment.

The representative of Roscomnadzor, the state telecommunications regulatory authority, Vadim Ampelonsky, said that he could make no comment because his agency was not involved in the drafting of the laws.

Get live updates in Agriculture by subscribing to the new SMS Farm TV service. Text the word & # 39; Farmers & # 39; at 22071.

Russian regulator Roscomnadzor has repeatedly accused Facebook and Google of not complying with Russian laws. He blocked access to LinkedIn in 2016 and attempted to do the same with the Telegram encrypted email service in April.

A Google representative in Russia declined to comment on the charges or the proposal of new fines. Neither Facebook nor Telegram's CEO, Pavel Durov, responded to requests for comment.

One of the sources that spoke about this proposal to Reuters works for a Russian technology company, one of them is a foreign technology company and the third is for an industrial lobby group.

READ ALSO:

MPs want Facebook, Google is leaking terrorist content

They spoke on condition of anonymity because they are not allowed to talk to the media.

& # 39; SIGNIFICANT AMOUNT & # 39;

As lawmakers and officials in the United States and the European Union, Russia is trying to limit the power of high-tech companies that have accumulated considerable wealth and a huge supply of data.

The proposal to levy 1% of business annual revenues could result in substantial fines.

The Russian subsidiary of Google, for example, generated a turnover of 45.2 billion rubles (687 million dollars) in 2017, according to the SPARK database which gathers business register data.

"For a foreign company, this already represents a significant amount," said the source of the foreign technology company, although they added that it was not clear how the company said. fine would be levied, some companies having no legal entity in Russia.

Under the proposed amendments, a fine could also be imposed repeatedly on the same company for each time it has committed a violation.

READ ALSO:

Google unveils new rule on political ads

In comparison, under the legislation in force, the maximum fine that can be imposed by Google in Russia in proceedings brought by Roscomnadzor is 700 000 rubles ($ 10 595).

This case concerns allegations that Google, which is owned by Alphabet Inc. (GOOGL.O), failed to comply with requests to remove search results from banned organizations in Russia. Google did not comment on the allegations.

Facebook said it was discussing with the telecommunications watchdog about its compliance with the rules. It did not move the servers containing the data of its Russian users in Russia, three years after the adoption of a law requiring the transfer.

In addition to tightening fines, the Russian authorities would retain the power to block companies' online services under the new laws, according to the draft proposal seen by Reuters.

The source of the industry lobby group said that companies in the sector could accept heavier fines if they were applied fairly and replaced the practice of blocking sites. But he added that companies would oppose rules allowing both fines and blockages.

"But as a general rule, anything that gets in the blocking system that has appeared sporadically at different times is a great idea," the source said.

The blockage has caused technical problems in the past. When officials tried to block Telegram in April, they inadvertently blocked Russian users' access to voice calls through Viber's messaging service and cloud applications for Volvo cars, among other services. The telegram is still accessible in Russia.