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26 June 2018
On 1 July 2017 the Federal Law of 1 May 2017 on the Amendment of the Federal Law on Information, Information Technologies and Data Protection and Certain Legislative Acts (the Audiovisual Services Law) took effect.(1) The law introduced an innovative legal regime for the operation of streaming and video on demand (VOD) services in Russia. More specifically, it introduced Article 10.5 into the Federal Law on Information, Information Technologies and Data Protection of 27 July 2006 (the Data Protection Law), as amended, which:
Notably, neither the Audiovisual Services Law nor Article 10.5 of the Data Protection Law distinguish between the governance of streamed videos and VOD services. Therefore, the relevant legal provisions will be applied de facto to all online cinemas functioning in Russia.
According to Article 10.5(1) of the Data Protection Law, an 'audiovisual service' is a website, webpage, IT system or piece of software that:
Pursuant to Article 10.5(16) of the Data Protection Law, the following information resources are exempt from regulation and are therefore not deemed to be audiovisual services under the law:
An audiovisual service can be owned by a Russian business entity or a Russian citizen who is not a citizen of another state. The Audiovisual Services Law sets out a restriction on foreign ownership of an audiovisual service in Russia. Specifically, unless otherwise provided by an international treaty, a foreign company or person or a Russian company with a foreign share participation of more than 20% may own, manage or directly or indirectly control more than 20% of the shares in the equity capital of the owner of the audiovisual service that is accessed by less than 50% of all internet users located in Russia, provided that the special commission of the Russian government has authorised such ownership, management or control. The responsible government commission must authorise such a foreign investment or participation if it will promote the development of the national audiovisual services market.
Roskomnadzor, the national IT regulator, maintains the audiovisual services register.
Under the Audiovisual Service Law and Article 10.5(2) of the Data Protection Law, Roskomnadzor can:
If an online resource located by Roskomnadzor in the course of its monitoring process meets the abovementioned criteria for audiovisual services, Roskomnadzor must:
Within three working days of receiving the abovementioned notification, the hosting provider or other party allowing for the audiovisual service's deployment on the Internet must provide the information necessary to identify the audiovisual service owner. As soon as such information has been received, Roskomnadzor will send another notification to the audiovisual service owner for recordation of the online resource in the register. In response, the audiovisual service owner must provide Roskomnadzor with all of the necessary documents to meet the foreign investment and ownership requirements within two months. Failure to comply with this obligation may result in the audiovisual service being blocked in Russia on the basis of the effective court decision.
Where an audiovisual service is accessed by less than 100,000 users per day over three months, it may be excluded from the register (ie, de-registered) on the audiovisual service owner's request. An audiovisual service can also be de-registered without the owner's request if it was accessed by less than 100,000 users per day over six months.
The Audiovisual Service Law and Article 10.5(1) of the Data Protection Law impose the following obligations on audiovisual services:
Where the dissemination of prohibited content is detected, Roskomnadzor can file a notice on the audiovisual service owner ordering the immediate cessation of the infringement. Non-compliance with such a notice may result in an administrative fine of up to Rb1 million. Repeated non-compliance may result in an increased administrative fine of up to Rb3 million.
In addition, Roskomnadzor can file a lawsuit with a competent court seeking the restriction of access to an infringing audiovisual service in Russia in cases of:
Failure to comply with these obligations and the applicable legal requirements may result in the infringing audiovisual service being blocked. In any event, where an audiovisual service fails to comply with requirements set out by law, it will incur administrative, criminal and other liabilities.
Online cinemas are one of the unique IT concepts that have recently received legal attention and special regulation in Russia. The Audiovisual Service Law's enactment will undoubtedly boost the development of the national market of streaming technologies and VOD services, as well as the whole online entertainment industry in the future. However, operators of such platforms should prepare for monitoring and random checks by Roskomnadzor and bring the distribution of their online media content in line with the effective legal requirements in Russia as soon as possible.
For further information on this topic please contact Sergey Medvedev or Ilya Goryachev at Gorodissky & Partners by telephone (+7 495 937 6116) or email (email@example.com or firstname.lastname@example.org). The Gorodissky & Partners website can be accessed at www.gorodissky.com.
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