Russian law may hit tech giants that refuse to open new offices in the country

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Apple in Russia
Apple has had run-ins in Russia before.
Photo: Caviar

Apple and other tech giants may have to open new offices in Russia or face “punitive measures” if they want to continue doing business in the country, Reuters reports.

This is part of an effort to enhance Russia’s control over services offered within the country.

The Reuters article notes that:

“The new legislation, which passed its third and final reading in the lower house of parliament, requires foreign sites with more than half a million daily users in Russia to set up a local branch or Russian legal entity. The lack of such a requirement currently allows foreign sites to formally remain outside of Russia’s jurisdiction, the bill’s authors said.

Websites that do not comply would be marked as being non-compliant on search engines, they could be excluded from search engine results, and banned from advertising in Russia and for Russians, the parliament said on its website.”

It’s not quite clear how this law would affect Apple. Apple already has a reported 8,126 employees in Russia and offices in Moscow. It doesn’t have any Apple Stores in Russia. However, Apple products are sold through local dealers. Is one Apple office enough, or will it need to consider more? That remains to be seen. This may be more about getting tech companies to jump through hoops for compliance, though.

Apple in Russia

Apple has already had a few tetchy interactions in Russia recently. In April this year, Russia’s Federal Antimonopoly Service (FAS) fined Apple $12 million for allegedly giving its products a competitive advantage over the competition on iOS. iPhones sold in Russia now suggest certain Russian apps as part of the setup process. There’s additionally a chance Apple TV+ could get shut out of Russia if it gets too successful. This is due to local sourcing laws about content made outside Russia. And Apple’s had to make Crimea part of Russia on local Apple Maps, and remove an LGBTQ Pride face for Apple Watch. On top of this, the company caved to demands to store some iCloud data on local Russian servers.

In each case, Apple has to weigh up sticking to its guns versus potentially being blocked from doing business. It can be a tough decision to make. It has faced similar challenges in places like China.

This latest bill still has to be approved by Russia’s upper house of parliament. President Vladimir Putin must then sign it into law. Reuters says this is likely to happen.

Source: Reuters