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can be expected to slightly accelerate inflation over coming months.
The damage caused by bad weather to Russian farmers in 2018 amounted to RUB7.3bn ($111mn), the Russian Agriculture Ministry said in a press release on November 23. The ministry noted that this year it plans to increase the costs to compensate farmers' expenses due to the redistribution of funds from other activities under the state program for the development of the agro-industrial complex. The ministry plans to allocate RUB1.86bn ($28.3mn) in addition to budgeted 1.89bn ($28.7mn).
9.1.7 TMT sector news
Russian authorities plan to significantly increase fines imposable on tech companies such as search engines, messengers, news aggregators, and others, Reuters reported on November 26 citing unnamed industry sources. The measure is aimed at forcing foreign and local tech giants to comply with demands of Russian watchdogs. The Russian government is keen to force tech companies to keep their data on Russian users in Russia where it is subject to Russian law and regulation. This week Russian communication regulator Roskomnadzor started an administrative case on Google, but the maximum imposable would be a laughable $10,000. In the meantime blocking the service that fail to comply with watchdog's demands also proved to be challenging. Earlier this year Roskomnadzor failed to block the Telegram messenger founded by Russian self-exiled digital entrepreneur Pavel Durov, after it refused to comply with the court ruling on passing the encryption keys to the Federal Security Bureau (FSB). Reportedly now the presidential administration and Roskomnadzor are developing amendments that would impose fines that would actually bite, bringing possible penalties to 1% of annual revenues in Russia and a minimum of RUB1.5mn even if no revenues were yet earned in Russia. Reuters reminds that Russian branch of Google reported RUB45.2bn revenues for 2017, putting possible fine for the company to $632mn. However, the mechanisms of enforcing the penalties are still unclear. Many companies only delegate marketing functions to Russian branches, and to determine how much exactly is earned in Russia could be challenging.
Russia's advertising market in January-September 2018 increased by 13% year-on-year to RUB328bn ($4.8mn), Vedomosti daily reported citing the data of Association of Communication Agencies. The TV market is expected to increase overall by 10% in 2018 and 2019. The latest data confirmed the trend that internet became the largest media in Russia, with RUB141.5bn spent on advertising online, up by 22% year-on-year. TV ad market increased by 12% to RUB131bn. While internet ads have grown to become the largest market, in September internet-based businesses have become the fastest growing advertisers on Russian TV, in January-September 2018 boosting the volume of ads placed 2.5-fold year-on-year. Reportedly internet companies accounted for 5.2% of TV ads market, which would translate into about RUB6.5bn on the RUB130bn market as of end of September 2018, as estimated by the daily. The bigger ad volume on TV is attributed to only pharmaceuticals, banks, and telecom operators. Industry sources told Vedomosti daily in October that through TV ads online services are trying to reach and capture an audience that is not yet active in the digital economy.
Private user-to-user (C2C) sales in Russian messengers and social
91 RUSSIA Country Report December 2018 www.intellinews.com