Russian IT companies are outraged by the upcoming cannibalistic law against Google and Apple

Five of Russia’s biggest IT organisations also requested the authorities not to endorse the “On the Marketplace” law, which caps the commission at 20 percent in application markets.

Friday, November 13, 2020, 18:28 GMT 

They are optimistic that this will have a negative effect on Russian industry and slow down the economy’s digitalisation.

Associations Against
Russia’s biggest IT groups vigorously rejected the bill to reduce the commission from the existing 30 percent to 20 percent in app stores. They wrote to the chairman of the State Duma committee on information policy, IT and communications, Alexander Khinshtein, in writing, according to TASS.

In their message, the organizations asked Khinshtein to refuse to endorse the “On the Marketplace” resolution, introduced by the deputy head of the “Equal Russia” party, Fedot Tumusov, in early September 2020. The letter was signed by five organizations: the Association for Electronic Communications (RAEC), the Association of Electrical Household and Computer Equipment Manufacturing and Trading Firms (RATEK), the Association of Domestic Software Developers, the Russoft Software Developers Non-Profit Alliance and the Association of Computer and Information Technology Enterprises (APK).

What is said in the letter
Russian IT organisations claim in their letter to Alexander Khinshtein that the bill of Fedot Tumusov “does not address any socially relevant problems that can not be addressed by the new antimonopoly and tax laws, as well as administrative legislative actions that come into effect on 1 January 2021.” The signatories to the letter are confident that it is to any degree contradictory to the current legislation.

The authors of the letter point out that the draft law violates the basic concepts of civil and legal practice, international tax policy and the Eurasian Economic Union (EAEU) regulations. In addition, the paper states that Tumusov’s new prohibitions are actually unprecedented in the globe.

“The subscribing associations claim that the implementation of the bill and its transition into law would in no way allow “the economic impact mentioned in the explanatory note to the bill to be accomplished, but on the contrary, would only lead to a worsening of the market situation.” They also believe that Fedot Tumusov’s brainchild “will exacerbate the conditions for doing business in Russia and sluggishly

“Having considered the proposed federal law “On the Economy” introduced by State Duma Deputy F.S. Tumusov within the context of our organisations, we, the undersigned heads of business groups, recommend that this bill not be sponsored,” the IT organizations summarized.

Who’s going to suffer?
If the bill is passed, all firms owning branded markets and working in Russia, without exception, will be affected. There are Google and Apple, for example, with their Play and Apple Shops, where the commission is just 30 percent respectively.

Against the context of a controversy between the computer game publisher Epic Games and Google and Apple, the deputy prepared his bill, which exploded specifically because of the high commissions in the markets, according to Epic Games. On August 13, 2020, just two weeks before the Tumusovs introduced their bill to the State Duma for review, the dispute began.

As a note, on August 13, 2020, Epic Games launched a new iOS and Android payment network (Epic direct payment). It has been integrated into Fortnite, the very popular free-to-play game. Epic Games provided players not to overpay Google and Apple for paid “chips” inside the game by displaying this site, but to price directly to the maker and save up to 20%. This is a flagrant breach of the laws of the Apple App Store and Google Play store, and without notifying Apple and Google, Epic Games launched a new payment scheme. Simultaneously and almost simultaneously, Apple and Google pulled Fortnite from their store catalog, and Epic Games immediately sued them all, as if waiting for such a result in advance. The length of her case was 62 pages.