Be My Guest ' Internet Companies Must Go Local In Russia

• Published date: 21 July 2021
• Subject Matter: Corporate/Commercial Law, Media, Telecoms, IT, Entertainment, Privacy, Corporate and Company Law, IT and Internet, Data Protection
• Law Firm: Gorodissky & Partners
• Author: Mr Stanislav Rumyantsev

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On 1 July 2021 a new law requiring online businesses to obey the national laws and register with the Russian authorities took effect. By the end of 2021, internet companies must open offices in Russia.

Purpose of new law

According to Parliament's explanatory note, the purposes of the Federal Law On Activities of Foreign Persons in the Information and Telecommunication Network Internet in the Territory of the Russian Federation (1 July 2021, 236-ФЗ) (the law) are to "formalize the official presence of foreign companies, whose business in the IT field affects interests of Russian nationals" and "establish equal business conditions for Russian and foreign persons". In fact, the law will help the authorities to apply their online and offline coercive measures to global websites or apps existing beyond the Russian borders.

Who must comply?

The law applies to the following businesses (the internet companies):

• non-Russian legal entities, other organisations and natural persons who own a website (or at least a page on a third-party website), mobile app or IT system (a web resource) that has more than 500,000 user visits from Russia daily and meets any of the following criteria
  • it contains information in Russian, a regional language of the Russian Federation or other language of Russian ethnic
  • it disseminates ads intended for Russia-based customers;
  • it processes data about users located in Russia; and
  • the owner of the web resource accepts money from Russian natural or legal persons; and/or
• non-Russian natural persons or legal entities, regardless of the number of users, that are
  • hosting providers or other persons that host web services used by Russians;
  • advertising networks if they disseminate ads intended for Russian customers; and
  • entities that operate information systems or software intended or actually used for receiving, transferring, delivering or processing electronic messages of web users, including those residing in Russia (so-called "organisers of data dissemination"). In other words, if a website or app supports user accounts, posting or messaging, it may fall under the law.

According to article 8 of the law, the Russian Data Protection Authority (Roscomnadzor) should record the owners of web resources in a publicly available register.

Under article 4(3) of the law, the government should establish a procedure for Roscomnadzor to identify...