18.09.2021

Zoom to Directly Sell to Russian Gov’t Agencies After Controversy

The Kremlin urged Russian companies Wednesday to switch to alternative virtual meeting platforms after Kommersant reported that Zoom had banned its distributors from selling to government agencies and state companies in Russia and post-Soviet countries known as the Commonwealth of Independent States (CIS).

“Zoom still intends to serve customers in the Russian market and the CIS,” the U.S. company said in an early Thursday statement carried by Kommersant.

Zoom will sell directly to Russian government agencies, the Kommersant business daily quoted the company as saying after controversy over reports that the video-conferencing platform had restricted premium access to state-affiliated entities.

Initial reporting suggested that Zoom banned public-sector sales in this market due to risks of U.S. sanctions and difficulties complying with Russia’s increasingly restrictive legislation.

Zoom said in its Thursday statement that it was still “in the process of developing our approach to the market.”

“Meanwhile, new and existing users in both the public and private sectors can request the purchase of Zoom accounts directly through our website,” Zoom said.

Zoom Video Communications leads Russia’s video conference market with one-quarter of its user base, but generates only 1% of its revenue from it, according to Kommersant.

Russia has previously blocked Western online platforms such as LinkedIn and in March began slowing down Twitter’s service speeds in the country in an attempt to force the U.S. social media giant to remove what it says is “illegal content.” It also requires tech companies to pre-install their devices with government-approved Russian software under a new law.

President Vladimir Putin has complained that large tech companies are competing with states and authorities are aiming to build up local competitors that can replace Western platforms. Russia has vowed to introduce its own equivalent of Zoom by 2022.

The Kremlin said that Putin uses the U.S. video conferencing platform Poly, which it argued is more secure than Zoom.

Zoom Bans Sales to Russian Government, State Firms

Video conferencing platform Zoom has banned its distributors from selling services to government agencies and partly state-owned companies in Russia and neighboring countries, the Kommersant business daily reported Wednesday.

Zoom has emerged as a leading virtual meeting platform since millions were forced into self-isolation due to the coronavirus pandemic and authorities imposed remote work rules to stop the spread.

Zoom’s authorized partner in Russia, RightConf, informed its Russian and ex-Soviet partners that the company is withdrawing sales licenses for state agencies and organizations with state beneficiaries, according to Kommersant.

Experts interviewed by Kommersant linked the ban to risks of U.S. sanctions and difficulties complying with Russian legislation, which Moscow began enforcing in full in recent years.

Zoom denied that it had banned sales to public-sector entities in Russia and the CIS after the Kremlin urged Russian companies to develop alternatives to Zoom and a lawmaker warned it could be blocked in the country.

“Zoom continues to be committed to serving customers in the Russian market and the Commonwealth of Independent States (CIS). We are in the process of evolving our approach in the region, and in the meantime, new and existing customers in both the public and private sectors can seek to procure Zoom accounts directly through our website,” a Zoom spokesperson told The Moscow Times.

Zoom’s policy could affect the Russian education market, Kommersant reported, adding that the company took part in dozens of tenders announced by Russian colleges and universities in 2020.

Zoom Video Communications, which occupies a quarter of Russia’s video conference market but generates only 1% of its revenue from it, did not respond to Kommersant’s inquiries.

Russia, which already requires tech companies to pre-install their devices with government-approved Russian software, has vowed to introduce its own Zoom replacement by 2022.

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