PayPal/eBay First To Bend To Russia’s New Data Rules

Despite complaints that the new rules are costly and difficult to follow, PayPal and its parent company eBay have announced that they will be the first U.S.-based companies to submit to new Russian rules that require Web companies to store Russian users’ data in Russia.

Specifically, the new law requires all online companies that handle the personal data of Russian citizens to keep that data locked up securely on Russian servers. Given the general nature of the phrasing, IT experts believe companies like Twitter, Facebook, Amazon and eBay are likely to be affected, as are most eCommerce and social media sites.

According to the Russian paper Kommersant, the head of eBay Russia and the leader of the state’s media watchdog met last week to discuss the law and how eBay can best and most directly comply with it.

“eBay is working on transferring data from Switzerland to Russia. The law goes into force on Sept. 1, but the company will finish this work earlier,” said an unidentified source that is reportedly familiar with the discussions.

A Roskomnadzor spokesman confirmed the meeting and further noted that eBay had “declared its intention to comply with the law.”

What is unknown is exactly what compliance will look like for eBay. It is not yet clear how much data will need to be transferred to Russian territory, nor is it clear if eBay will rent local server space or work to build their own in the country.

eBay currently has 3.7 million customers in Russia as of the second half of last year.

Internet freedom advocates have complained about the new law, citing it as an example of a broader trend toward heightened Internet regulation.

The law was initially supposed to go into force on Sept. 1, 2016, then it was pushed ahead to Jan. 1, only to be pushed back to Sept. 1.



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