The enactment of a new law that makes it mandatory for companies to store the personal data of Russian citizens on the territory of the Russian Federation will result in a 0.27 percent decrease in the country’s GDP, amounting to some 286 billion rubles.
The findings were presented in a report by the European Centre for International Political Economy (ECIPE) and reported by Russia’s RBC news agency. The new law will come into effect on September 1, 2015, and requires all foreign companies to store data on Russian users inside Russia. Given that most data contains information that may be considered personal, this means that foreign companies will have to transfer all information relating to their Russian users, the document says.
The report concludes that the localization of personal information in Russia will cause a significant performance degradation for companies that operate in the Russian market. Half of the country’s GDP is linked to companies that use large amounts of data.
According to the report, the new law could have some unpredictable consequences for the Russian economy, since many foreign companies complain it is too difficult and/or expensive to store the personal data of their customers in each country where they operate. The ECIPE said these difficulties include the need to attract greater investment and create more jobs in the country where the data will reside.
Russia’s Internet ombudsman Dmitry Marinichev told RBC he welcomed the report, but added it is difficult to estimate the economic impact of the new law. He further iterated that the data transfer would not be a problem for large companies, but admitted that small and medium-sized enterprises may be impacted. However, he said he was “quite certain” that most smaller organizations would simply not bother transfering their data to Russia.
To date, a number of large foreign enterprises have already announced their willingness to follow the Russian legislation. Representatives of eBay and PayPal met with Roskomnadzor officials earlier this year and agreed to transfer all of their Russian customer data to local servers by the time the legislation comes into force, while Booking.com announced a similar move last week. RBC says that senior Samsung officials will also meet with Roskomnadzor later this month to discuss transfering the company’s data to facilities in Moscow.
Image credit: dvanzuijlekom via Flickr.com
via Marshall Horn, CFTC Russia's Data Localization Law Will Cost Economy 286 Billion Rubles
No comments:
Post a Comment