Russia is facing potential restrictions of foreign ownership in digital companies. This follows on similar restrictions over Russian mass media companies and online cinemas which took effect in 2016 and 2017, respectively (see our earlier post). These proposed amendments coincide with the announcement of major e-commerce and foodtech JV deals in Russia with participation of Mail.ru, the owner of Russia’s top social network VKontakte (a JV with Alibaba, Megafon and the Russian Direct Investment Fund (RDIF) as well as a JV with Sberbank).
In particular, on 26 July 2019, Mr. Anton Gorelkin, member of the Russian Parliament, proposed a draft law introducing amendments to the Federal Law on Information, Information Technologies and Protection of Information (the “Draft Law“). The Draft Law provides for restrictions in relation to foreign shareholding in certain Internet / information resources in Russia. The scope of restrictions and consequences of incompliance are similar, although not identical to the above-mentioned rules on foreign control over mass media and online cinemas which led to a substantial modification of the media industry in Russia in 2015 – 2016.
For more on what this means for your business continue reading on our Global Media & Communications Watch blog