Russia takes ‘guidance’ from the E.U. in its battle with U.S. tech firms

Following the E.U.’s long-standing and ongoing tax fight with big companies such as Google and Apple, it seems Russia is now making noises about forcing the major U.S. tech companies operating in the country to cough up more cash.

The proposed move is seemingly being spearheaded by politician Igor Shchyogolev, former minister of communications and now one of President Vladimir Putin’s key advisers, as reported by local newspaper Vedomosti [in Russian].

According to the report, the new law would require international companies such as Google, Microsoft, and Apple to pay more taxes in Russia. It seems this move is aligned with a recent change of law in the European Union, which Russia is not a part of, that stipulates taxes should be paid based on where the consumer buying a service is based, rather than some tax haven where the company selling the goods claims to be based. The new E.U. law came into effect on January 1, and affects all telecommunications, broadcasting, and electronic services in both the consumer and business realm.

However, Russia isn’t just targeting U.S. tech firms — back in October the country approved a new law designed to curb Russian companies using offshore tax shelters too.

Yandex, the Russian equivalent of Google, is being used to help illustrate the extent to which Google’s taxes in the country should be more than what they currently are — the report mentions that in 2013, Google paid around 468M RUB ($8 million) in taxes in Russia, while Yandex paid 3.2 billion RUB ($58 million). Of course, part of this could be because Yandex carries out more business in its native country, but it is more than likely that if Google was to be taxed based on where its customers are (i.e., in Russia), it would have to pay more than what it currently does.

Today’s news comes less than a month after Russia’s antitrust regulator, the Federal Antimonopoly Service (FAS), opened a case against Google, at the request of Yandex, over the way Google forces its own services on Android devices.

Again, this move mirrored similar investigations elsewhere, most notably in Europe, where companies including Microsoft and Nokia have previously filed antitrust complaints with regulators, arguing that Google’s own services receive an unfair advantage by being bundled with Google’s mobile operating system, effectively shutting out rivals.

In relation to this, news has just emerged, again from Vedomosti, that the FAS will now consider the case against Google on April 13, which should take around nine months to conclude. In total, there are three Google bodies being investigated: Google Russia, Google U.S., and Google Ireland.

It’s clear that in seeking to assert its authority on a global scale, Russia is looking to the E.U. for precedent, adding further fuel to the flames that are increasingly engulfing U.S. tech firms that ply their trade across the broader European continent.