Online audiovisual services to come under regulation in Russia

Amendments to the Federal Law “On Information, Information Technologies and Information Protection”* (the “Amendments”) will come into force on 1 July 2017. They will regulate the activities of the owners of online audiovisual services. The changes may affect both local and international players.

Definition of audiovisual services owners

The Amendments define the owner of audiovisual services as the owner of: (i) a website;
(ii) website pages; (iii) an information system; and/or (iv) computer programmes that are used to create and/or organise the distribution of audiovisual works on the internet. At the same time, the activity of such owners must meet the following criteria:

• access to such audiovisual works is provided for a fee and/or on the condition that the viewers also watch advertisements; and
• the audience of the service over 24 hours exceeds 100,000 users that are located in Russia.

The Amendments expressly exclude the entities listed below from the list of audiovisual services owners:

• online mass media that are registered as such in Russia;
• search engines; and
• information resources, where users primarily publish or post their own works and materials by themselves.

In fact, these Amendments affect the activities of online cinemas, whilst other resources (such as various social networks) are excluded from the regulation.

Requirements for audiovisual services owners

The owners of audiovisual services are required to comply with a number of obligations, including, in particular: (i) a ban on dissemination of certain information, such as extremist materials; (ii) specific requirements on dissemination of information to general public; (iii) installation of a programme that determines the number of users; (iv) availability of a valid email address that it can use to receive legally significant messages; and (v) provision of an age-based classification of its content.

Register of online audiovisual services

The Russian Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (“Roskomnadzor”) will maintain a register of audiovisual services. If Roskomnadzor finds an unregistered audiovisual service on the internet, it will send a request to its owner to supply it with the information that is needed to add the service to the register.

If the total number of daily visitors to an audiovisual service over three months is fewer than 100,000, the owner can send an application to Roskomnadzor with a request to remove its service from the register. However, if the total number of daily visitors to an audiovisual service is fewer than 100,000 for six consecutive months, such service may be deleted from the register at the initiative of Roskomnadzor.

Ownership of audiovisual services

Audiovisual services can be owned only by Russian legal entities or Russian citizens who are not citizens of other countries.

Foreigners are allowed to own such Russian legal entities. However, there are some limitations on specific foreign operators.

So, foreign operators, who own an informational resource whose number of users in Russia is less than 50% of its total audience (number of users), are entitled to own, manage or control, directly or indirectly, a stake exceeding 20% in the Russian owner of the audiovisual service, provided that such ownership has been agreed with the relevant Russian government commission.

The Amendments define foreign operators as: (i) a foreign state; (ii) an international organisation; (iii) an organisation owned or controlled by the above entities; (iv) a foreign legal entity; (v) a Russian legal entity with a share of foreign participation of more than 20%; (vi) a foreign citizen; (vii) a stateless person; (viii) a Russian citizen, who is also a citizen of another country; and (ix) affiliates of any of the abovementioned entities.

Liability of audiovisual service owners

The Amendments will also affect the Code on Administrative Offences, which outlines violations related to the illegal dissemination of certain information, as well as the failure to comply with requests by Roskomnadzor to eliminate such violations. The liability of legal entities for such violations ranges from RUB 300,000 to RUB 3m (EUR 4,540 - 45,400).

Violations can also lead to the blocking of the audiovisual service by a court decision.

Comments

Given the high penalties, we recommend that audiovisual service owners with an audience of more than 100,000 users in Russia conduct an audit of their activities to ensure they fully comply with these new requirements and, if necessary, make the relevant changes in their ownership structures.

If you have any questions on the matters referred to in this Alert, please do not hesitate to contact CMS Russia experts Anton Bankovskiy and Vladislav Eltovskiy or your regular contact at CMS Russia.

* In Russian