Audio-Visual Services in Russia Become Subject to Regulation as of July 1, 2017

On July 1, 2017, the law on the regulation of audio-visual services (also known as the law on online cinemas) enters into force.

The full name of the law: Federal Law No. 87-FZ "On amendments to the Federal law 'On Information, Information Technologies and the Protection of Information' and to individual legislative acts of the Russian Federation" dated May 1, 2017 (hereinafter the "Law").

Essence of the Law

  1. The "audio-visual service" concept is introduced.
  2. Several new obligations are imposed for audio-visual services.
  3. Certain restrictions are set on foreign ownership of such services.
  4. Roskomnadzor shall have the power to check compliance with the provisions of the Law, including maintenance of the register of audio-visual services.
  5. New liabilities are imposed.

What is an audio-visual service?

A site, a site page on the Internet, an information system and (or) a computer program meeting the following set of criteria:

  • used for formation and (or) organization of distribution through the Internet of audio-visual works,
  • accessed for a fee and (or) in return for watching advertisements,
  • aimed at attracting the attention of users located in the Russian Federation, and
  • available within 24 hours to more than 100,000 Internet users located in the Russian Federation.

A site that does not match at least one of the above criteria is not an audio-visual service, and is not subject to new liabilities and restrictions. The Law also provides for certain exceptions. For example, the following services are not audio-visual services:

  1. Online media that are registered as such in accordance with the Federal Law of the Russian Federation No. 2124-1 "On the mass media" dated December 27, 1991 (the "Mass Media Law");
  2. Search engines;
  3. Information resources where audio-visual works are placed mainly by the Internet users; the procedures and the criteria defining such information resources are to be developed by Roskomnadzor.

What obligations are imposed?

Several obligations are imposed on the owners of audio-visual services. In particular, the owners of audio-visual services will be required to (1) keep a record of users, (2) monitor the content and (3) provide their contact information.

(1) Keeping a record of users

The owners are obliged to install software programs to track the number of users of their resources. The list of such "counters" will be provided by Roskomnadzor.

(2) Monitoring the content

The owners are obliged to:

  1. Prevent the use of the service for committing criminal acts, for disclosure of information that constitutes a state secret or other secret specially protected by the law, for distribution of materials containing public calls for terrorist activities or publicly justifying terrorism and other extremist materials as well as materials promoting pornography, the cult of violence and cruelty, and materials containing foul language;
  2. Prevent the distribution of TV channels or TV programs that are not registered in accordance with the Mass Media Law;
  3. Comply with the prohibitions and restrictions imposed by the law on referendums and elections, as well as with the requirements of the law on the     distribution of mass information;
  4. Classify audio-visual works in accordance with the requirements of the Federal Law No. 436-FZ "On the Protection of Children from Information Harmful to their Health and Development" dated December 29, 2010, i.e. categorize the works depending on their subject matter, genre, content and presentation according to age of children.

(3) Contact information

The owners are required to post on the page of the service the e-mail address as well as surnames and initials (for individuals) or names (for legal entities). This address will be deemed a valid address for legal communication.

Restrictions on foreign participation

The Law imposes restrictions on foreign ownership of Russian audiovisual services. Such services may be owned only by Russian legal entities or citizens of the Russian Federation not having the nationality of another state. However, there are various rules depending on the share of Russian users in the total audience of the respective service.

< 50% – subject to approval of the government commission

Foreign owners of the information resource that is used for distribution through the Internet of audio-visual works, if the number of its users located in Russia is less than 50% of the total number of the users of this resource, can own, manage, or control more than 20% of the shares in the share capital (including indirectly) of the owner of the audiovisual service subject to approval of the government commission.

> 50% – without restrictions

No restrictions are imposed on the audiovisual services with a share of Russian users exceeding 50%.

Powers of Roskomnadzor

The Law provides for the establishment of the register of audio-visual services that will be maintained by Roskomnadzor. This public authority will carry out independent monitoring and will enter in the register the information resources that meet the criteria of audio-visual services.

Roskomnadzor is also empowered to send inquiries to identify the owners of audio-visual services and to file a petition in court to restrict access to the audio-visual service.

Liability

The Law provides for administrative liability:

  • for transmission of unregistered media (the fine for legal entities amounts to 700,000 Roubles);
  • for violation of the established procedure for distribution among children of information harmful to their health (the fine for legal entities amounts to 500,000 Roubles);
  • for dissemination of information containing public calls for extremist activities (the fine for legal entities amounts to 1 million Roubles);
  • for failure to comply with the requirements of Roskomnadzor on elimination of revealed violations of the legislation (the fine for legal entities amounts to 1 million Roubles, in case of repeated violation – to 3 million Roubles).

The Law also provides for liability for the owners of audio-visual services for violation of the restrictions on foreign participation. Access to such audiovisual services through Internet access operators can be restricted.

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