Russian government supports capping IT companies foreign ownership

MOSCOW (Reuters) – The Russian government has supported a draft law on limiting foreign ownership in major IT companies to just under 50 percent, according to a parliamentary website, a move which may further tighten state control over the internet.

Initially, the proposals on non-Russian ownership were harsher and seen capped at 20%.

Shares in, Yandex, a Russian equivalent to Google, and another large IT company, Mail.ru, have been very sensitive to discussions about the law, first proposed last July.

A government letter, dated Oct. 18, and published on the website for the legal acts disclosure, said the criteria of “significant informational resources” should be defined.

“Requirements for limiting of foreign participation in the significant informational resources in the relation to the voting shares at the level of 50% minus one share should also be envisaged,” the document said.

“The government of Russian Federation supports the draft law, taking into account the mentioned notes.”

The proposal has drawn critics from several sides, including from the companies themselves.

Under the draft law, which if approved would come into force from Jan. 1, 2020, any companies which did not comply would not be allowed to promote themselves or others inside Russia.

Critics say Russian authorities are looking to tighten control of the internet, threatening to stifle individual and corporate freedom. But the Kremlin says it is trying to protect the integrity of the internet’s Russian-language segment.