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Russia readies cloud laws to force Google, Microsoft to keep data in nation

This article was first published by V3 online and can be found online here.

Russia is working to introduce a new law that would force tech firms such as Facebook, Google and Microsoft to build data centres in the country to ensure data gathered on citizens stays in Russia.

The Russian parliament, or Duma, passed the first reading of the bill on Tuesday evening.A Google translationof the Russia news websiteLenta.ruoutlines the scope of the law:

"When collecting personal data […] the operator is required to provide a record, systematisation, accumulation, storage, updating, retrieval of personal data of citizens of the Russian Federation, databases located on the territory of the Russian Federation."

This effectively means any firm collecting data, ranging from cloud providers to apps, would have to guarantee data gathered on users does not leave the country.

If the law is not followed, the state telecoms agency Roskomnadzor would be given the authority to force local internet providers to restrict access to services, theoretically meaning US firms could be banned.

If the law goes ahead it could cause serious friction between the US and Russia. The US government is currently fightinga case against Microsoft over Washington's belief it has the right to access any data stored overseasif it is gathered by a US company.

Microsoft is fighting back, with the backing of Apple and Cisco, but as yet the outcome remains unclear. If the government wins the fight, Russia's push for a law that would force firms to keep data on Russian soil could lead to yet more legal spats in the years ahead

Jenny Hotchin, technology solicitor at Ashfords LLP, toldV3the law, despite being promoted as having the best intentions of Russians at heart, appeared to be yet another attempt at internet control by the government.

"The Russian State Duma's decision to pass a bill requiring that all personal data of citizens is stored inside Russia is just another step towards restricting the use of the internet within the country," she said.

"Under the guise of being a bill to protect the personal data of citizens the bill will stifle the development and use of technology by both businesses and individuals."

She said that smaller, local firms would be hurt as US giants,would be able to afford the cost of building local data centres.

"Whilst some of the big players such as Google and Facebook may decide to invest in Russian servers to locally store personal data, new and smaller providers simply won't have the cash to make such investment.

"At the very least Russian businesses will fall behind as they have to wait for localised service provision. It is not anticipated that failure to comply by cloud companies will result in fines but they may be blocked by ISPs.

"The digitalisation of the worldwide economy makes Russia's move to close its doors to international internet business a risky move."