Yandex N.V. is a Russian multinational internet company best known for its search engine also called Yandex. While it was originally started in Russian at yandex.ru, it now has a global English version at yandex.com.
But Yandex is more than Russia’s biggest search engine. It is the biggest technology company in Russia, period. Yandex offers many other types of products and services, from music streaming and e-commerce to smart home technology and self-driving cars. Think Google mixed with Amazon, Uber and Spotify and you’re getting close to the empire that is Yandex.
Yandex was founded in 1997 by Arkady Volozh (who is the current CEO of the company), Arkady Borkovsky and Ilya Segalovich. The name is derived from the phrase “Yet Another iNDEXer.” Yandex’s search engine is similar to other popular search engines in most ways. It returns a list of blue links and also offers search results with images, videos and top news. In a 2019 interview with the Search Engine Journal, the Yandex search team shared that voice search accounts for about 20 per cent of searches.
To put things into perspective, in Russia, Yandex is more popular than Google. But being the crown jewel of Russia’s silicon valley also has its drawbacks. The country’s government sees the internet as contested territory amid ever-present tensions with the US.
According to Moscow-based journalist Evan Gershkovich who spoke with the MIT Technology Reviews in a podcast, the Russian government wants influence over how Yandex uses its massive trove of data on Russian citizens. Foreign investors, meanwhile, are more interested in how that data can be turned into growth and profit. Gershkovich explains how “Yandex’s ability to walk a highwire between the Kremlin and Wall Street could potentially serve as a kind of template for Big Tech.”
Imagine having one and only one tech company serving you everything you need during the day. “Everything from your morning news, music, and groceries, to your taxi home at night all delivered and operated by a single mega-corporation. Well, head over to Russia and you’ll find that world is very much a reality,” says Gershkovich.
According to him, Yandex even got an extra boost from the coronavirus pandemic. Revenue for the company’s delivery apps grew by 42 per cent in the second quarter of 2020. But this kind of success doesn’t come for free. Because the company is constantly growing, many foreigners are showing interest in Yandex and the Russian government is not happy about it. For them, only the government should have ultimate control of the massive amounts of data that tech companies hold on Russian citizens.
As a result, Yandex gets caught in between the demands of the foreign investors who hold most of its stock and those of the Kremlin. For years, the Kremlin and other state security services didn’t pay attention to the internet. Then, in 2008, when Russia fought a five day war with Georgia, Yandex News (which works the same way as Google News) started picking up liberal and independent media news about the war and putting it in its feed. This really upset the Kremlin, which wanted its viewpoint to be highlighted.
“The Kremlin realised what power the internet actually could have. So it started to realise that this was an arena that it would if not control, at least pay close attention to,” says Gershkovich. First, Yandex faced a potential takeover by Kremlin-linked oligarch Alisher Usmanov. A year later in 2009, Yandex handed Russia’s largest lender, the state-owned Sberbank a so-called “golden share,” which allowed the bank to veto transactions involving more than a quarter of Yandex’s stock. This was meant to satisfy the Kremlin with any transactions the authorities weren’t happy with.
But when rumours surfaced that Sberbank was now hoping to buy a 30 per cent stake in Yandex to protect it from so-called “potential trouble,” in New York, the company lost a billion dollars in market value over these worries. It then took Yandex about a year but the company changed that golden-share into what they called the Public Interest Foundation, which has 11 seats on its board.
Three belong to Yandex, and the other eight are divided up among influential business groups and state-affiliated universities. This new structure now has that veto power that used to be with Sberbank. “The Public Interest Foundation has three main functions. The first is to block deals that would concentrate more than 10 per cent of Yandex’s stock under a single owner. The second is to control operations involving intellectual property. And third is the control of personal data,” explains Gershkovich.
In recent years, Russia passed two key laws which affected internet companies. The first one requires them to store data on servers in Russia only. And the second law is this notorious, so-called ‘Sovereign Internet Law’, which means that a state-owned communications infrastructure would be created and would allow the country to cut itself off from the global internet.
From the Kremlin’s perspective, the Sovereign Internet Law would be a way to control what its citizens can see online, just like in China. The only difference between the two countries is that, while China has complete control over its tech platforms, Russia is still playing around with the idea of doing so.
When Russia tried to block the popular messenger app Telegram, it stated for about a year that it was blocked. All the while, authorities kept using it themselves, including state media channels and even the Kremlin spokesman Dmitri Peskov. A year and a half later, the government just announced that Telegram was no longer blocked.
“It remains to be seen whether this is something that Russia is actually able to pull off. And so while it may want to be China in this sort of way, it sometimes falls short,” adds Gershkovich. This whole new way of moderating big tech companies is something that Facebook has also been pressured for.
In response to that, Facebook created this so-called ‘oversight board’, which is similar to how Yandex’s Public Interest Foundation has universities and big companies that are also part of it. Facebook’s oversight board has legal and human rights luminaries who are able to review and overturn some of the platform’s decisions. Yandex may foretell not only the sorts of demands that a company like Google and Facebook could face going forward, but also the solutions that they might come up with to retain some sort of independence in the way that Yandex has here in Russia.
Russia’s plans to start its own version of the internet have been in the headlines recently, but it’s nothing new. In 2014, Russian President Vladimir Putin raised fears about cybersecurity and sovereignty, and revealed that the Russian government had been developing a plan to create an entirely separate internet in Russia—in case of a global emergency, he claimed.
In early February, the lower house of Russian parliament, the Duma, convened to debate a new bill which would create a domestic Russian internet. With the exception of United Russia (Putin’s party), every other party was in opposition to the bill—but as United Russia has the majority, the bill has moved forward—with or without the support of other parties.
The state’s grip on internet access in Russia has been tightening for many years. In July of 2014, the Duma passed a law which required websites with data on Russian citizens to store it within the country’s own database. Big websites like Twitter and Facebook came under fire for not complying with these regulations this year, although they made no significant effort to correct this either.
Two years later, in 2016, other laws passed by the Duma made private online networks illegal, and also made it compulsory for internet and telecommunications companies to keep records of communications for six months at least. But even though these laws were instituted as sweeping reforms, there are minimal enforcement procedures in place.
Demonstrators coursed through the streets of Moscow, numbering around 15,000, in protest against this new bill. They say that it constitutes yet another form of censorship by the Russian government, masked under concerns about cybersecurity. Michel Svetov, an activist and blogger based in Moscow, asserted to The Moscow Times that these are further attempts by the government to control what people can and cannot see on the internet in a bid to stifle protests against inequality and corruption more generally.
This bill would be an amendment to a law which was passed in 2003, called the Federal Law of Communications. It states that traffic exchange points—essentially where servers send requests to other servers, such as your internet service provider sending a signal to the servers for Wikipedia—would have to be reviewed by the Russian government. The Federal Service for the Supervision of Communications, Information Technology and Mass Media, known as the Roskomnadzor, is the state agency in Russia which endowed with the ability to deem what content on the internet is legal. Roskomnadzor already has a list of websites labelled as threats to national security, which has been the subject of many protests previously.
In 2017, around 60 percent of Russian internet traffic was handled by foreign servers. Changing this rapidly on such a massive scale would be a significant undertaking. Russian internet service providers (ISPS) would also have to create entirely new filters that monitor online traffic coming in and out of the country and block ‘banned’ content. The resources necessary to create this entirely separate network are immense. Russia already has a national domain name system—.ru—but if you wanted to access material from outside what’s hosted in Russia, then servers in Russia would have to send a request to the external server hosting that content.
In order to make this bill a reality, all of the web content that the Roskomnadzor deemed legal would have to be duplicated, copied, and somehow hosted on servers within Russia itself. But loading all of this content onto Russian servers—which would mean anticipating anything people could look up online, such as university students searching for sources for a paper or aspiring chefs looking up recipes from other countries—is complicated. Even if these systems simply duplicated information available elsewhere, there are still problems around copyright, ownership, and intellectual property which would complicate the matter. In this case, there would be huge amounts of material—such as books, music, or even films—which people in Russia simply wouldn’t be able to access.
While a test was scheduled to take place before a second reading of the bill (date unconfirmed), there is no information which indicates that this has taken place. This test—which would have seen Russia disconnecting from the global internet briefly—would give internet service providers information about how this would actually affect them. For example, this would make it clear what kinds of information was definitely hosted on foreign servers, and which kinds of capacities they would lose as a result of disconnection.
Critics have been pointing out the law’s flaws and predicted that it won’t be implemented as planned. Karen Kazaryan, chief analyst of the Russian Association of Electronic Communications (RAEC) declared, “It won’t work. Russia is not China. It’s very complex and expensive to build a system like this and we simply don’t have the engineers to realize this project.” Still, if passed, this bill would give the Russian government the ability to censor online content and disconnect its citizens from the rest of the world, enacting censorship on an even wider scale.