bne IntelliNews – Yandex talks about its approach to data

Russian-born tech giant Yandex has responded to claims about user data security. In a blog post published on April 1, the company clarified the functions of the AppMetrica analytics tool, which came under intense scrutiny last week. He also insisted that his use of data is transparent and invited international auditors to carry out an assessment of the company’s privacy policy and data collection practices, which he says comply with the normal practices of major technology companies in the United States and around the world.

The purpose of the blog post was to respond to international media reports accusing Yandex’s software of storing user information in Russia and suggesting that the company may pass such data to the Kremlin.

Yandex’s response to the first claim is clear: yes, it keeps some data on Russian servers. Plus, the company says it’s pretty open about this fact.

“We don’t hide our Russian roots… We work in full compliance with international and local laws. Data received from app developers is stored on a distributed storage platform in both Finland and Russia, as clearly stated in our privacy policy,” the blog reads. “The idea that we ‘secretly’ send this data to Russia is simply wrong. Our Privacy Policy has always been publicly available to everyone.

Articles questioning Yandex’s handling of customer data have focused on software called AppMetrica – a tool that allows app developers to analyze user performance in the app and improve user experience by result. Yandex peers have similar tools, called SDKs (software development kits).

Yandex says AppMetrica works the same as comparable SDKs, including Google’s Firebase, Yahoo’s Flurry, and analytics platform Adjust. Like them, the company only collects data that the app developer and user expressly allow it to analyze.

The company was also careful to point out that the data collected by AppMetrica is generalized and aggregated into one big analytics report. “We do not collect any sensitive user data regarding names, addresses, telephone numbers, payment information, personal identification data or any other sensitive personal information that the user shares with the application. We do not and cannot also not collect data about what users do outside of the app,” Yandex said in its blog post.

Instead, AppMetrica logs data useful to the app developer, including the user’s operating system version, time spent on the app, and when the app crashes.

Addressing the question of whether the Russian government can access user data, Yandex was clear: “We have never provided user information on apps that have AppMetrica installed, nor have we been told. never asked.”

In theory, Internet companies can respond to access to information requests from governments. Former Google chief legal officer David Drummond wrote about precisely this in Google’s blog, The Keyword, warning in 2013 that government requests for user information were on the rise.

In addition to Russian authorities, Yandex could be asked to provide data to international bodies like Interpol.

“We are completely transparent about all data requests we fulfill and we regularly publish a detailed report,” the company blog reads.

The global tightrope walker

Yandex, which was founded in Russia in 1997, has since expanded its presence in international markets. Listed on the US NASDAQ and headquartered in the Netherlands, the company is giving new meaning to the term “digital nomad”.

Yet this globalism has also created an unenviable situation for Yandex. Caught between the often contradictory requirements of Russian regulations and its international players, it seems that the slightest gesture by the company could cause umbrage.

This was reflected in the joint statement made by non-executive directors Esther Dyson and Ilya Strebulaev, who resigned from the company’s board in March, citing the difficulty of reconciling these competing pressures.

“The company and all of its employees are going through a terrible time. They find themselves under enormous pressure both inside and outside the country… It has become impossible for the team to continue providing a free and open information platform to the Russian public without breaking the law and putting the company and its employees in danger.

A similar story underlies the resignation of deputy chief executive Tigran Khudaverdyan just weeks after Ms Dyson and Mr Strebulaev, after being sanctioned by the EU. This decision came as a shock to people who know the company and Tigran – a completely self-taught man who joined Yandex as an engineer over 15 years ago, who is hardly someone who could be described as “close to the Kremlin”. Nevertheless, he was forced to resign.

Yandex has made it clear that the stories it airs in Russia are simply in line with Russian law, which has cracked down on independent journalists, including forcing them to call the war in Ukraine a “special military operation,” or they may be found guilty of treason, punishable by up to 15 years in prison.

John Boynton, US Chairman of the Board of Yandex, said: “We were shocked and surprised to learn that Tigran has been designated under EU sanctions, and we are extremely sorry to see him resign from his functions as Executive Director and Deputy Director General”.

A model for the world of technology

In fact, Yandex has been navigating these choppy waters rather deftly for years. Big tech companies around the world are grappling with their concurrent obligations to government and stakeholders, but no one has yet found a perfect solution. Needless to say, this fine line is much harder to cross for a company originating from Russia.

But Yandex showed a lot of common sense in 2019 when it restructured its corporate governance. The share price had taken a hit as shareholders feared the company’s growing customer base could make it a target for draconian regulations, nationalization or a ban on foreign ownership.

In response, Yandex created a special body called the Public Interest Foundation (PIF), composed mainly of representatives of Russian higher education institutions, and assigned it two seats on the board. The trade-off was that Yandex would retain control of its operations and management in exchange for granting the PIF veto power over a limited range of issues, including the transfer of Russian users’ personal data to third parties, the sale of intellectual property and the conclusion of agreements with non-Russian companies.

The compromise eased shareholder concerns, with the company’s share price jumping significantly on the news. Bloomberg columnist Leonid Bershidsky argued that Yandex’s move “could be seen as a model for Big Tech,” granting bodies made up of NGO and university representatives veto power over socially responsive in exchange for the ability to unhindered shareholder and customer demands in all other areas. . “It could probably satisfy most critics of Big Tech in democracies as well,” Bershidsky suggested.

Yandex is now looking to divest its Yandex.zen and media platforms, as reported bne IntelliNews. This too seems consistent with the desire to reconcile the pressures coming from within Russia with those of the company’s stakeholders.

Both platforms had become problematic, with a series of new laws introduced after Russia invaded Ukraine, forcing news aggregators like to only feature publications officially listed in the national register. of the media watchdog.

At the same time, pressure is mounting on multinationals to leave the Russian market. Yandex is currently in negotiations to sell its news services, perhaps in an effort to break out of the double bind created by owning a Russian news platform.

A source close to the talks confirmed bne IntelliNews that Yandex has entered into negotiations with VK for the sale of its information services.

Yandex offers a range of verticals, from ridesharing apps to delivery robots. It now hopes to drive monetization of its existing technologies through consolidation and international expansion. The skills and resources he has already demonstrated in managing the conflicting demands of international stakeholders will serve him well in this pursuit.

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