Russia tightens its grip on citizens' personal data

The lower house of the Russian parliament passed a bill yesterday that requires websites to store Russian citizen data on Russian soil, according to Lenta.ru.

If this bill passes through the upper house, email and cloud services, social networks, shopping websites, and any other website with a presence in Russia will have to put data centers in Russia by September 2016.

The bill means that Internet businesses — even those that have already invested heavily in Europe-based data centers — will have to invest in new facilities in Russia to accommodate Russian citizens’ data if they want to continue serving the Russian market.

If Internet companies fail to comply, they’ll risk being blocked by the Russian government.

The bill amends an existing law on personal data and is supposedly in the interests of national security and citizen privacy. It comes amid increased international concern over U.S. government surveillance as outlined by former National Security Agency contractor Edward Snowden. Pressures are mounting for U.S. businesses, which are increasingly seen as agents of the government. Verizon recently lost business in Germany for this very reason.

But Russia in particular has become an unfriendly place for Internet enterprises in recent years — not just for U.S. companies. Pavel Durov, founder of the country’s top social network, Vkontakte, was ousted in April, a few months after selling his stake in the company and a series of shareholder disagreements. He left the country to start another social network elsewhere saying, “Unfortunately, the country is incompatible with Internet business at the moment,” in an interview with TechCrunch.

He may have been onto something.