Russia is introducing new rules and regulations for online services that cater to the country’s popular. This new approach is actually quite similar to China which places strong restrictions on internet companies and even downright bans some of them. The Russian Parliament passed a first bill last night which decrees that the personal data of all Russians has to be stored in the country. This means that online services will need to have physical servers located within the country if they wish to operate there.
The effect of these new regulations will not only have an impact on major internet services like Google, Facebook or Yahoo but on internet services of all sizes, even apps will fall under the same category. Big corporations might be able to afford setting up physical servers in Russia but for startup online services it would be a costly affair, one that they might not be able to afford right out the gate.
The bill also dictates that companies based outside Russia will not be allowed to send user data outside the country, until and unless they can provide certain guarantees regarding data storage within Russia. Companies that don’t comply will see access restricted by Roskomnadzor, Russia’s state telecommunications agency, in other words they will be banned.
Once this bill goes through Russia’s parliamentary process and if its enforced without any changes, it will come into effect in September 2016. It will change the way how online services do business in the country, and even if it provides ample time to them to set up shop there, the huge costs involved are likely to dissuade many from even considering it.