Putin establishes fines of up to 10% of income for large technology companies

The President of Russia, Vladimir Putin signed a law this Thursday that allows the imposition of fines of up to 10% of annual turnover to large international technology companies if they fail to comply with the regulations that require them to open representative offices in the country and register with the regulator.

Russian legislation on the registration of foreign technology companies was enacted by Putin in 2021 and establishes not only the opening of representative offices, but also the opening of a personal account of the representative with powers on the website of the Russian communications regulator, Roskomnadzor, among other requirements, to be able to operate in Russia.

The violation of this regulation, directed at technological giants such as Twitter, Google, Facebook or Telegram, can now lead to fines of between 6.6% and 10% of the annual turnover of these companies in Russia. A repeated violation of the law establishes an economic penalty of between one tenth and one fifth of the total income in a previous fiscal year.

In the case of non-compliance with the legislation on the registration of foreign technology companies, the most serious sanctions are a partial or total blocking of their activities.

Russia already blocked Facebook Instagram and Twitter in the country.

The law also provides for the possibility of Russian authorities blocking Internet search results or limiting payments from Russian users. It also introduces a ban on the distribution of Russian advertisements about the sanctioned company and the company itself in Russia.

The list of companies that had to open subsidiaries or representative offices in Russia includes 20 platforms.

It refers to social networks (Facebook, Instagram, TikTok and Twitter), video services such as YouTube and Twitch.tv, instant messaging applications (WhatsApp, Telegram, Viber), email services (Gmail), search engines (Google, Bing), hosting providers (Amazon, Digital Ocean, Cloudflare, GoDaddy) and online stores (Aliexpress, Ikea and Iherb) and Wikipedia.

Google, as a result of the judicial persecution in Russia, has already declared itself in suspension of payments, and Ikea has stopped operating in the country as a result of the Russian military campaign in Ukraine.