The court imposed revolving fines on foreign IT corporations for the first time


The court imposed revolving fines on foreign IT corporations for the first time

For the first time, the court imposed revolving fines on foreign IT corporations in Russia: Google and Meta (formerly Facebook) were fined 7.2 billion and 2 billion rubles, respectively. The result of the development of the conflict may be an attempt by the authorities to slow down Google traffic in Russia, experts believe, this may lead to a slowdown of the entire Russian Internet and problems with Android devices.

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On December 24, the court imposed a turnover fine of $ 90 mln on Google for repeated failure to delete prohibited information. "We will study the court's decision and after that we will determine further steps," the press service of Google told Kommersant. On the same day, the court imposed a revolving fine on Meta (the parent company of the renamed Facebook network) — about $26 million.

The size of the turnover fine can range from 1/20 to 1/10 of the company's annual turnover in Russia, in the case of Google, the share of turnover is not called. Google LLC's revenue amounted to 85.46 billion rubles in 2020, and the company also paid 10 billion rubles in dividends to parent Google International for 2015-2017, according to its accounting report.

Previously, Google has been fined more than once for refusing to delete prohibited information.

On September 29, she was fined 6.5 million rubles according to Roskomnadzor protocols, in October Google paid fines of 32.5 million rubles, at the same time Deputy head of Roskomnadzor Vadim Subbotin warned that the corporation could be fined for systematic violations. On December 7, she was fined 14 million rubles. And in July, Google for the first time received a fine of 3 million rubles. for refusing to localize the data of Russians.

Local law

"If a revolving fine does not bring Google to its senses, I'm afraid that very unpleasant measures will be used — a scenario in which bailiffs can block the accounts of a Russian legal entity of a company for non—compliance with a court decision, and this will completely paralyze its economic activity in Russia," commented Deputy Anton Gorelkin in his Telegram channel. In May, Roskomnadzor did not rule out that Google's traffic could be slowed down, since the corporation does not filter content enough.

This is the first case when the court imposed a turnover fine on an IT company.

"It is no coincidence that this happened on the eve of Catholic Christmas, when Google's central office is not working," says Mikhail Klimarev, executive director of the Internet Protection Society Foundation. According to him, this week Roskomnadzor requested information from telecom operators about the use of Google Global Cache (GGC) — servers on which the cache is stored: "When a user requests some content, it is downloaded from abroad once, and then stored in the cache, from where it is downloaded next time. This saves traffic dozens of times." In his opinion, by March, the authorities may at least try to slow down Google.

If you turn off GGC or slow down YouTube, then the main data transmission channels will be slowed down, this will mean slowing down the entire Russian Internet, Mr. Klimarev believes. In addition, Google is also smartphones and other Android-based devices that need to be updated, he recalls. Against the background of fines, there is a risk that Google may block Russia, the expert argues. The profit of Google LLC in 2020 amounted to 1.73 billion rubles, and the total profit of Alphabet Inc. (Google's holding company) was $40 billion.

The revolving fine shifts the decision-making from Roskomnadzor to Google: if the corporation stops working with Russians, it will be possible to form a message that Google did it itself, suggests the founder of LiveInternet, chairman of the board of the Digital Economy Development Fund German Klimenko.

According to Karen Ghazaryan, Director General of the Internet Research Institute, "one action cannot change the existing picture much." It is important that the court imposed fines at a time when all global IT companies are deciding whether to comply with the law on "landing", according to which they are obliged to organize a full-fledged presence in Russia from January 1, 2022, Mr. Kazaryan notes.

Michael Zippo

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