The government of Russia has proposed a substantial increase to the amount that it would be able to fine any international tech firms that breach domestic laws.
The law currently in place obliges search engines to deliver filtered results and stipulates that messaging services must provide encryption keys. Companies that violate these laws are fined no more than a few thousand dollars, which is ineffective as a deterrent. Offences can cause sites and services to be blocked, but these bans can be circumvented by using a virtual private network.
However, Reuters reports that President Vladimir Putin’s administration is now proposing that if global companies such as Facebook or Google violate Russian law, they should be fined as much as 1% of their locally generated revenue. Companies could be issued a fine for each time they are found to have violated the law.
Tech companies have been sent copies of the proposals and invited to provide feedback. Google’s Russian unit brought in revenue of $687 million in 2017; a Reuters sourced noted that 1% of this would constitute a “significant amount” – notably higher than the current maximum penalty of $10,595.
However, it would be challenging for the government to enforce a penalty on a company that has no legal entity in Russia. A law passed three years ago obliges tech firms active in Russia to store user data on local servers; Facebook has still not complied with this directive and is negotiating with the Russian authorities.