Photographer: Andrew Harrer/Bloomberg

Netflix Access in Russia Could Be Curbed by Ex-Agent’s Draft Law

  • Lawmaker Lugovoi calls for limit to audiovisual services
  • Foreign ownership in streamers would be capped at 20%

A former security services officer turned lawmaker has proposed a bill to restrict foreign ownership in online film and music streaming services in Russia, possibly threatening the local operations of companies such as Netflix Inc.

State Duma Deputy Andrei Lugovoi’s draft calls for the government to compile a list of online audiovisual services that have more than 100,000 monthly users in Russia. Foreign ownership in such services would be restricted to 20 percent by July 2017 if the law is passed, according to a document posted Friday on the website of the lower house of Russia’s parliament.

“Services including online cinemas and other services for digital content distribution remain unregulated,” Lugovoi said in a letter accompanying the draft. “This law aims to close a loophole in legislation.”

Lugovoi’s draft resembles a law President Vladimir Putin signed in 2014 that restricted non-Russian ownership in publishers and broadcasters to 20 percent by the end of 2016. The cap led Germany’s Axel Springer SE to sell its stake in Forbes Russia, among other titles, while Finland’s Sanoma Oyj sold the Vedomosti business daily. Since becoming president in 2000, Putin has brought major television stations under state control, pushing opposition discourse toward the internet.

Lugovoi’s bill doesn’t mention individual companies. Netflix officials declined to comment.

Lugovoi is one of two former security officers accused by a U.K. judge of assassinating Alexander Litvinenko, a vocal Putin critic in London in 2006. He denies wrongdoing. Lugovoi has previously backed a law designed to block websites deemed extremist without a court order. He’s also sponsored a bill to tax revenue that Google, Apple Inc. and other foreign companies earn in Russia.

According to the draft, so-called over-the-top services would be banned from campaigning for any candidates during Russian elections and would be also required to respond to communications regulator Roskomnadzor’s requests to remove illegal content within 10 days. Those who fail to comply will be banned.

The current draft does propose a loophole for “special cases,” when the government commission on foreign investments could permit a higher ownership share. To make it to actual legislation, the draft needs to be approved by the Duma and be signed by Putin.

— With assistance by Lucas Shaw

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