Russian lawmakers are authorizing tougher fines for foreign tech companies without offices

  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, July 5 (Reuters) – Russian lawmakers on Tuesday approved a bill that would impose tougher penalties, including fines, on foreign internet companies that fail to open an office in Russia.

Moscow has long sought greater control over tech companies, and disputes over content and data have intensified since it deployed military forces to Ukraine on February 24.

Foreign social media giants with more than 500,000 daily users have been obliged to open offices in Russia or face penalties up to and including outright bans since July 1, 2021.

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Now, the revenue penalties that Russia imposed on Google and Alphabet’s (GOOGL.O) meta-platforms (META.O) for hosting banned content could be imposed on companies that don’t open offices after the lower house passed the law in the second of three readings.

Fines can amount to up to 10% of a company’s turnover in Russia in the previous year, rising to up to 20% for repeated violations.

The state communications regulator Roskomnadzor last November listed 13 mostly US companies that must establish themselves on Russian soil by the end of the year.

Only Apple (AAPL.O), Spotify (SPOT.N), Rakuten Group’s messaging app Viber (4755.T) and photo-sharing app Likeme have fully complied — although Spotify opened its office in March in response on Russia’s actions in Ukraine and subsequently suspended its streaming service.

Meta, which found Russia guilty of “extremist activities” in March, is no longer listed and its Facebook and Instagram platforms are banned, but its messaging app WhatsApp is not.

Four other companies have met at least one other Roskomnadzor requirement but have not established a Russian legal entity or branch. According to the government website, these were Google, Twitter (TWTR.N), ByteDance’s TikTok and Zoom Video Communications (ZM.O).

Chat tool Discord, Amazon’s (AMZN.O) live-streaming unit Twitch, messaging app Telegram, bookmarking service Pinterest (PINS.N) and Wikipedia-owner Wikimedia Foundation have taken no steps to address the issue, according to the site to comply

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Reporting by Reuters

Our standards: The Thomson Reuters Trust Principles.

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