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Private copying levy, big data and little bit more for today

Business asked the Russian ministry of economic to consider the idea to reduce the rate of private copying levy in Russia. The private copying levy is to be imposed on the equipment capable of copying, but customers bus such equipment lesser and lesser.

Mostly such equipment is necessary for professional purposes but Russian law does not take such aspect into account. According to current Russian law 1% from customs price is to be paid from each leviable unit of equipment to accredited collecting society as private copying levy.

Certainly producers and importers of equipment don’t like this private copying levy and don’t want to pay it. The customers buy equipment, capable of copying, less often, according to business. Actually the Russian customers, as well as European or USA customers, prefer to shift to “access model” of consumption, rather than “download model”.

The “access model” provides fast access to content and does not require occupy memory space in device especially for content. In other words if the customer has permanent access to content s/he has no need to copy it. The Russian ministry of economic has promised to consider this proposal, which is to be discussed at the working group.

The association, representing producers and importers of equipment imposed by private copying levy, who proposed Russian ministry of economic to reduce the rate of private copying levy, claims the rate should be 0.5% from customs price of equipment. The rationale of proposal is very simple – profitability of distributors is only 2-3%.

In other words the distributors of leviable equipment make not more than 2-3% profits on such equipment. But it is not all. The other reason is “double payment”. Most distributors import the equipment to Belarus or Kazakhstan through Russian territory and must pay in Russia and in the country of importing. Simply to say they pay private copying levy in transit country and in country of distribution.

The idea of free internet for socially necessary web-sites in Russia would be dramatically expensive for Russian telecom operators the business claims. The Russian president Putin has proposed to provide the Russians with free internet access for “socially necessary” web-sites. According to the business the free internet access would cost approximately 150 bln Roubles each year at minimum.

The gross revenue, generated by the “documentary telecommunication” services, would be 450 bln Roubles. There was also underlined that thanks to free access the traffic could increase drastically (most people use messengers, social networks and other entertainment web-sites, like electronic mail). Therefore the telecommunication business asks the government to compensate losses from president’s initiatives.

And the last is big data. The Russian ministry of communication (MinCom) has proposed the draft law on big data. It is not the first attempt to regulate processing of big data in Russia. The Russian business dislikes MinCom’s draft law. The Russian IT companies (, Megafon, Yandex, Sberbank and others) believe this draft law would cause discrimination of Russian companies in internal market.

The draft law would interfere with development of AI. The business proposes to exclude definition of “big data” from draft law, because the “categories of processed information are always changed, and the definition of big data is some kind of metaphor, therefore it’s not possible to provide unambiguous legal definition”. Adoption of law would “make the access to depersonalized data, including those collected by the state authorities, more complicated”.

Besides, the business is concerned by the lack of regulation necessary to implement the draft law. The law lack necessary details and what regulation could be adopted the business is not able to predict. Unpredictable nature of additional regulation entails risks of excessive regulation for analytics of big data and could restrain the development of big data market.

The draft law also provides unequal conditions for Russian and foreign companies, processing big data, in internal market. The draft law would not cover foreign companies and therefore they would work freely in Russia and would have huge competition advantage. While the foreign companies could develop innovative products and services in Russia, the market power of Russian companies would be restrained by the proposed draft law.

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