- Russia has passed laws requiring companies to store Russian user data within the country, and has fined firms like Google, Apple, and Coinbase for violating them.
- Last week, a Moscow court fined cryptocurrency exchange Coinbase $11,000 for refusing to localize Russian user data storage. This follows an October ruling against Zoom.
- While the fines are still small for major tech companies, Russia’s crackdown shows its determination to gain control over user data within its borders, raising privacy concerns.
Russia has been issuing fines against major international tech companies for not storing Russian user data within the country’s borders. The latest company to be fined is the cryptocurrency exchange Coinbase.
Background on Russia’s Data Localization Laws
In recent years, Russia has passed laws requiring companies that collect data on Russian citizens to store that data within the country. Critics see this as an attempt by Moscow to exert more control over the internet. Companies that have received fines for violating these laws include Google, Apple, Spotify, WhatsApp, and Airbnb.
Details of Coinbase’s Violation and Fine
Last week, a court in Moscow fined Coinbase 1 million rubles ($11,000) for refusing to localize the data of Russian users. The ruling took place at the Tagansky District Court, which found Coinbase guilty of violating the data localization law. This follows an October ruling against Zoom for repeatedly declining to store Russian user data in Russia.
In May, Russia’s internet regulator Roskomnadzor ordered foreign internet companies to localize Russians’ personal data storage by July 1. Roskomnadzor said around 600 foreign companies had complied by the deadline.
Consequences and Implications
The fines against Coinbase and other tech giants demonstrate Russia’s determination to gain more control over user data within its borders. This could allow increased government surveillance while reducing the privacy protections Russians receive from major international platforms.
However, the fines are still fairly small compared to the revenues of these large companies. It remains to be seen whether escalating fines or other measures will convince firms like Coinbase to change their data storage policies. For now, Russia’s crackdown continues against tech companies that fail to localize Russian user data.
Russia’s data localization push reflects a broader global trend of governments seeking to exert more sovereignty over online data. The Coinbase ruling shows that even crypto firms are not immune to this pressure. However, tech companies argue localized data storage threatens users’ security and privacy. The clash between governments and tech giants over data jurisdiction will likely continue for the foreseeable future.