Friday

29th Sep 2023

Russia data law to cost billions, silence dissent

  • Russia risks losing up to 0.3 percent of its GDP because of a new data law (Photo: Alex F)

Russia is moving toward a data storage regime set to cost its economy billions and to help authorities crack down on civil rights.

The new law, an amendment to Russia's privacy legislation, was enacted in July last year and enters into life on 1 September.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It allows data to flow out of Russia.

But article 18.5 of amendment FZ-242 requires all companies in Russia, whether they are national or international, to use only Russian-based data centres when collecting or processing the details of Russian citizens.

Hosuk Lee-Makiyama, the director of the European Centre for International Political Economy, a think tank in Brussels, said it’s designed to give authorities greater snooping powers.

“The real reason is not necessarily that they want to keep the Americans out. They want their local security agents in”, he said.

Lee-Makiyama, who co-authored a report on the issue, out this week, has calculated the law could cost Russia up to 0.27 percent of its GDP, or some 286 billion roubles (€4.7bn).

Forcing companies to localise data means they’ll no longer able to run certain types of online services.

“It can be enterprise, resource planning, it can HR software, industrial software - they can’t run it in Russia anymore”, Lee-Makiyama said.

He noted, for instance, that around five percent of costs in machine manufacturing are related to some form of data handling.

“If you are running a factory with a 5 percent profit margin, which is not that unusual by the way, basically it means your entire profits just disappeared and you go out of business”, he noted.

He added that some big companies, such as Russian airline giant Aeroflot, are against it and that they will try to pass the extra costs to clients.

“It’s misguided economic nationalism”, he said.

Architects of madness

Data localisation gives the Russian government greater control over all forms of online activity.

Civil rights organisations, opposition members, investigative journalists, LGBT rights activists, are at greater risk of being exposed because of it.

Sergei Mitrokhin, the leader of Yabloko, a Russian opposition party told this website that FZ-242 is the latest in a series of laws designed to suppress dissent.

Other legislation increases scrutiny on NGOs which are designated as “foreign agents”. It also gives authorities sweeping powers to eject or arrest journalists or activists who are deemed “undesirable”.

The Kremlin wants to “suppress all connections between Russian citizens and Russian organisations [civil society]”, Mitrokhin said.

“It’s the policy of an authoritarian state”.

Authoritarian state

If the law enters into force, it will make Russia the first advanced economy to impose a data localisation scheme.

Similar laws exist in India, Indonesia, and Vietnam.

China is also considering to restrict big data firms by limiting storage to inside the country.

Brazil toyed with the idea a few years ago, with the so-called Marco Civil law, but then dropped it.

Europe, in 2011, also mooted the creation of a Great Firewall or Virtual Schengen border, by reference to its Schengen free-movement zone. But the proposals were dropped after howls of complaint by civil society.

Joe McNamee, director at European Digital Rights, at the time described the virtual Schengen idea as “absurd”.

“Despite all of the costs in terms of democracy, freedom of speech, and even the economy, there is no analysis of any benefit or expected benefit that, even mistakenly, the architects of this madness expect to outweigh the cost,” he said.

Poland's culture of fear after three years of abortion 'ban'

Poland in 2020 imposed a near-total ban on abortion, triggering mass protests — and today the demands for access to safe abortion continue. On International Safe Abortion Day, dozens gathered in Brussels calling for solidarity among member states.

Opinion

Time for a reset: EU regional funding needs overhauling

Vasco Alves Cordeiro, president of the European Committee of the Regions, is advocating a revamp of the EU's regional policy so that it better supports all regions in addressing major challenges such as the green and digital transitions.

EU Ombudsman warns of 'new normal' of crisis decision-making

Emily O'Reilly cited the post-pandemic recovery funds, the windfall taxes on energy companies, and the joint purchase of vaccines, as procedures which received limited scrutiny from the national parliaments — as a result of emergency decision-making powers that bypassed parliament.

Opinion

Time for a reset: EU regional funding needs overhauling

Vasco Alves Cordeiro, president of the European Committee of the Regions, is advocating a revamp of the EU's regional policy so that it better supports all regions in addressing major challenges such as the green and digital transitions.

Opinion

How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Latest News

  1. Poland's culture of fear after three years of abortion 'ban'
  2. Time for a reset: EU regional funding needs overhauling
  3. Germany tightens police checks on Czech and Polish border
  4. EU Ombudsman warns of 'new normal' of crisis decision-making
  5. How do you make embarrassing EU documents 'disappear'?
  6. Resurgent Fico hopes for Slovak comeback at Saturday's election
  7. EU and US urge Azerbijan to allow aid access to Armenians
  8. EU warns of Russian 'mass manipulation' as elections loom

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us