The list of foreign companies that are required to open representative offices in the Russian Federation has been replenished with the largest foreign hosting providers

The list of foreign companies that are required to open representative offices in the Russian Federation has been replenished with the largest foreign hosting providers and domain registrars. Many of them have already restricted their activities in the country, but have not terminated relationships with existing clients. Potentially, Roskomnadzor may prohibit making payments to hosters, but such a restriction will only apply to Russian banks. If he stops the transfer of personal data to them, corporate clients will have to change the host, lawyers believe.

Roskomnadzor has expanded the list of foreign companies that, in accordance with the law on “landing”, must establish a representative office in Russia. It includes Amazon Web Services (AWS), GoDaddy and ten other hosting providers, including Bluehost, HostGator and Network Solutions (part of Newfold Digital). This is the first example of adding to the list of hosts.

As a general rule, the norms of the law “on landing” apply to foreign owners of sites with an audience in Russia of 500,000 or more users per day. The site must have a Russian-language version, be advertised among residents of the Russian Federation or accept payments from them. In the case of hosters, Roskomnadzor has the right to put companies on the list for “landing” without additional requirements – it is enough that they have users “including on the territory of Russia.”

The inclusion of IT companies in the list allows Roskomnadzor to apply “coercive measures” against them, up to blocking the site and prohibiting payments.

In 2022, the regulator took advantage of this to oblige Yandex to flag Wikipedia, TikTok, Twitch, Zoom, etc. as violators of the law, as well as ban ads for Google services (see below). “Kommersant” dated April 7, 2022).

These hosters provide 17.4% of all sites on the Internet, according to W3Techs data. The top three most popular hosts are Amazon, Newfold Digital, and Shopify. The GoDaddy group of companies ranks fifth in the ranking of hosters, but is the largest domain name registrar: according to Domain Name Stat, 80.3 million domains (11.85%) are registered through GoDaddy.

The companies that Roskomnadzor is trying to “ground” have already reduced their work in Russia. AWS and Bluehost have stopped registering new customers from Russia since March 2022, but have not terminated contracts. GoDaddy has stopped selling .ru and .ru.com domain registrations, but has not stopped working with customers. Ionos (listed by Roskomnadzor) announced a complete halt to cooperation with Russian customers and suppliers.

Network Solutions told Kommersant that Newfold Digital continues to work with customers, but due to restrictions on payment systems, it cannot accept payments from banks from Russia and territories controlled by it. The representative of the company did not comment on the decision of Roskomnadzor. Other companies did not answer Kommersant’s questions.

If Roskomnadzor prohibits the transfer of personal data to foreign hosters, it will be safer for corporate clients to change partners, says Ekaterina Abashina, a lawyer for the Moscow CCA DBA and Partners.

In the case of a ban on processing payments to a company from the list, it will only apply to Russian banks – “there are no risks for an ordinary user, but for organizations serving him, there are.”

The ban on making payments to foreigners now “lost any meaning,” said Sarkis Darbinyan, managing partner at DRC law firm. He considers the slowdown and blocking of hosters to be more likely “coercive measures”. The lawyer, however, doubts that this will disrupt the work of the sites hosted by them. “It is unlikely that Roskomnadzor will dare to block all IP addresses belonging to the services from the list, otherwise half of the Russian Internet will stop working,” he notes.

Yuri Litvinenko