New anti-extremism amendments could have a chilling effect on freedom of speech on the Internet and lead to massive losses for Russia’s top Internet and telecom companies.

A woman surfs the Internet on her smartphone in Moscow's subway, Russia. Photo: AP

For another take read: "Understanding the real impact of Russia's new anti-extremism law"

On July 7, Russian President Vladimir Putin signed a package of stringent anti-terrorism amendments into law. Given the potential ramifications of these amendments, they have resulted in a sweeping backlash from Russian society, from religious leaders and human rights advocates to mobile phone operators and Internet companies.

The President’s signature concluded a three-month epic of legislative activity initiated on April 7 by United Russia party member Irina Yarovaya, head of the Duma Committee for Security, and senator Viktor Ozerov, chairman of the Defense and Security Committee of the Federation Council. The document was the last to be approved by the sixth Duma, which had already gained a measure of infamy for its resounding initiatives, including the Dima Yakovlev Law that placed a ban on adopting children by American families.

The new federal legislative amendments introduced changes to Russia’s Criminal Code and Code of Criminal Procedure. In Russia, the legislation is compared to the USA Patriot Act, which also put serious limitations on the freedom of speech on the Internet. Passed after the terrorist attacks of September 11, 2011, the Patriot Act enhanced the authority of the U.S. security agencies - including the Federal Bureau of Investigation (FBI) - and entitled them to conduct mass surveillance across a wide range of telecommunications platforms until the law expired in 2015.

Unlike its American analogue, in which a terrorist act or suspicion of terrorism served as grounds for interference in private life, the new Russian legislation does not have an excuse like the terrorist acts of September 11. Moreover, while the Patriot Act prescribed covert surveillance of citizens, the new so-called “Yarovaya Law” mandates open surveillance. Despite protests from the Human Rights Council, individual rights advocates, heads of communication companies and even Protestant religious communities, the legislation finally passed.

There are several reasons to be concerned about the new legislation.

First, the Criminal Code now provides for more severe accountability based on the repressive Article 282, known for its vague definition of “extremism.” Also, the law is now supplemented by the article “Non-Reporting of Crime” (nicknamed the “non-informing article”), which could result in up to 1 year of imprisonment.

An article on international terrorism has been introduced, which provides for prosecuting suspects in terrorist acts committed outside Russia. This effectively extends the law’s applicability without any boundaries. Finally, the Criminal Code has been supplemented by an article on mass unrest (or rather, getting someone involved in such an activity), which now also could result in a prison term.

And there’s more. The list of crimes for which a person can be prosecuted from the age of 14 has been expanded (from 22 to 32). Religion has also been affected: missionary activity is now permitted only for registered communities. In addition, the state postal service and private courier firms are now obliged to unseal parcels with a goal of discovering forbidden items.

As far as Internet censorship is concerned, notably a penalty of up to 7 years imprisonment has been introduced for proof of terrorism in social networks. The few repressive measures against potential extremists that did not pass the final revision include deprivation of citizenship (which used to be practiced in the Soviet Union with respect to dissidents) and limitations on leaving the country.

The most widely debated part of the Yarovaya Law is the requirement for Internet companies and mobile phone operators to store metadata, text messages and phone calls, and provide access to those to the Foreign Intelligence Service (SVR) and Federal Security Service (FSB). This would appear to violate the privacy of correspondence laid down by the Russian constitution.

Additionally, the communication companies are required to decipher and hand over to the FSB. all traffic data and “encryption keys” to the codes (including those for popular messenger services). To comply with these requirements, the companies will have to build, from scratch, huge infrastructure including data processing centers (DPC). And this does not even include the cost of their operation.

As of August 2014, Russian Internet companies have been obliged to store their users’ data for half a year. According to some estimates, the operators’ new expenses will exceed 2 trillion rubles ($70 billion), a figure that is 2-3 times their annual profit. The Internet companies will face new expenses, too. Thus, the Group has calculated that the installation of new equipment alone will cost up to $2 billion dollars, compared to the company’s annual profit of less than $600 million.

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On June 17, the heads of four major operators petitioned the Federation Council speaker Valentina Matvienko to stop the amendments. The petitioners pointed out that the amendments were damaging to the industry, unconstitutional, and even dangerous in terms of national security itself, as the concentration of huge volumes of data related to state secrets increases the risk of unauthorized access to them.

When passage of the law became inevitable, Sergey Soldatenkov and Andrey Duboskov (the heads of Russian mobile phone service providers Megafon and MTS, respectively) proposed to at least introduce a one percent tax on operators so that the state used the collected means to build the DPCs. But all in vain: as of July 1, 2018, the Internet operators will be obliged to store metadata for 1 year, and mobile phone companies for 3 years. In contrast, the head of the Ministry of Telecom and Mass Communications (Minkomsvyaz), Nikolai Nikiforov, refutes the fact that there will be losses or any potential price hikes passed on to consumers.  

In view of the colossal expenses, which the operators threaten to compensate for by curtailing the development of new infrastructure (including delaying the introduction of their 5G networks), it’s strange that some Duma members remain optimistic. Roman Terekhin, an expert of the Duma Committee for Information Policy, believes that the creation of such infrastructure will promote the development of the IT industry and open a new segment in the economy.

Internet ombudsman Dmitry Marinichev is more reserved: in his opinion, a new market will in fact emerge, but it will hardly lead to the development of domestic production of hardware or software, which will be imported at a high price. It is not yet clear how and for what purpose this volume of data is going to be stored. As Marinichev points out, there will be only very narrow, specialized demand for that.

Presumably, Marinichev has the state and the federal security services in mind: the new segment of the economy mentioned by Terekhin will be closely linked to the state sector, which is saddled by corruption. Creating unbearable conditions for the mobile phone operators can easily profit the state and particular individuals that are tied to it. Accordingly, the market reacted immediately to the amendments: the shares of Russian communication operators dropped 4 percent on the day the legislation was signed.

The Russian authorities’ desire to possess users’ personal data is understandable not only in view of the terrorist threat that really remains quite grave in Russia. Various officials suggested earlier that censorship based on the Chinese or Iranian model should be introduced across the Russian Internet. And, by way of example, Russian officials note that the Indian authorities demanded the Google and Skype encryption keys as early as 2010.

In his article in the business magazine Vlast, Aleksandr Bastrykin, the head of the Investigative Committee of Russia, proposes, based on the experience of these Asian countries, that strict control be imposed over the Web. He considers the Internet to be an instrument of the “hybrid war” of the U.S. against Russia.

The Russian authorities see a threat in the social networks, which played an important role in the “Arab Spring,” political upheaval in Ukraine and the mass protests of 2011-2012 in Russia. The security services have repeatedly demanded that the owners of social networks such as Pavel Durov, the founder of the social network Vkontakte (the Russian Facebook), grant access to users’ personal data by an extrajudicial procedure. Now they have a right to that, with non-compliance leading to significant financial penalties.

If that level of surveillance becomes technically feasible, no Russian Internet user will be safe.
 Threats will not only come from the state apparatus, but also from hackers, business rivals and just about anyone who can get access to this private data. Several times already, databases have been leaked in a scandalous way onto the Web. Such data will be even easier to steal from the new data processing centers, and that poses a risk to everyone.

“Tightening the screws” both online and offline is especially relevant in view the deteriorating economic situation in Russia and the forthcoming parliamentary elections in September (not to mention the presidential elections scheduled for 2018). The current Russian elite wants to keep power at all costs and views the Internet as just another instrument to achieve that goal. Even if constant, Big Brother-style surveillance is not yet technically feasible, the authorities are sending a very clear message to Russian citizens – it’s still very possible to interfere in the private lives of everybody, with no exceptions.