Despite having previously stated it would not issue further clarifications, in August 2015, the Russian Ministry of Communications and Mass Media (Minkomsvyaz) issued a further statement regarding the data localization law. The Ministry of Communications is empowered to supervise the data protection authority (Roskomnadzor) and to provide interpretations of laws that fall within their purview (including the data localization law). The Minkomsvyaz statement reiterated that the law does not have retroactive effect – personal data of Russians collected prior to September 1, 2015 may reside in foreign jurisdiction so long as they are not updated or changed, at which point they would be subject to the localization requirement. The clarification further noted that data localization requirement would not apply to entities that are not resident in Russia. This statement is notable for being issued in writing, and providing companies with a statement of standards and expectations that may be cited by companies should issues arise.
See previous coverage in Data Matters July 21, 2015 Post: Impending Russian Data Localization Law
Sidley does not practice law in Russia, so the information here is based on our understandings from public sources and discussions with local counsel. This article should not be construed as advice about Russian law.
We are rapidly approaching the effective date for the so-called Russian “data localization law,” a development that prompted considerable backlash from the global business community and could have significant consequences for entities operating in the Russian market. In July 2014, Russia adopted Federal Law No. 242-FZ, which in effect requires that information a company holds pertaining to Russians must be stored on servers physically located within Russia. These obligations apply to individuals in their capacity as employees as well as consumers; thereby impacting even companies that do not maintain brick-and-mortar operations in Russia.
On June 29, the FTC and New Jersey Attorney General announced the filing of a joint complaint, and proposed, stipulated settlement, against an Ohio-based app developer, Equiliv Investments LLC and an individual officer of the company. The federal and state enforcement agencies alleged that Equiliv marketed a free app that users believed would let them earn rewards points for playing games or downloading affiliated apps. The agencies alleged that Equiliv explicitly represented the app was free of malware when in fact the app’s main purpose was actually to load malicious software on the users’ phone to mine virtual currency. Allegedly, the app took control of the devices’ computing resources and degraded the phones’ performance by draining battery life and data plans, and causing the devices to charge slowly. The malware was alleged to pool the computing resources of consumers’ mobile devices to benefit the company’s effort to generate virtual currencies through a peer-to-peer network to compete with other devices in solving complex mathematical equations – a process known as “mining.”
The first edition of The Privacy, Data Protection and Cybersecurity Law Review appears at a time of extraordinary policy change and practical challenge for this field of law and regulation. Several Sidley lawyers in the Privacy, Data Security and Information Law practice have contributed to this publication.
Editor’s Preface, Alan Charles Raul
- Chapter 1, “European Union Overview,” William Long, Geraldine Scali and Alan Charles Raul
- Chapter 2, “APEC Overview,” Catherine Valerio Barrad and Alan Charles Raul
- Chapter 9, “Hong Kong,” Yuet Ming Tham and Joanne Mok
- Chapter 12, “Japan,” Takahiro Nonaka
- Chapter 16, “Singapore,” Yuet Ming Tham, Ijin Tan and Teena Zhang
- Chapter 20, “United Kingdom,” William Long and Geraldine Scali
- Chapter 21, “United States,” Alan Charles Raul, Tasha D Manoranjan and Vivek Mohan