Contributed by: kellyseal on Monday, August 08 2022 @ 07:40 am
Last modified on Monday, August 08 2022 @ 07:43 am
A Russian court recently fined Match Group 2 million roubles ($33,280 USD) for its failure to store user data in Russian territory. Match Group owns the popular dating app Tinder, among others.
According to Reuters, Russia is taking action against American companies for refusing to store user data within the country, including against Meta’s WhatsApp, Expedia Group, and Snap Inc. Last month, the court fined Google’s parent company Alphabet for 15 million roubles because it was storing user information outside of Russia.
The move seems to be part of a larger strategy to penalize U.S. tech companies for controlling the data of its citizens in the wake of Russia’s war with Ukraine.
Match Group did not respond publicly to the fine, but Expedia Group released a statement saying it was reviewing the court’s decision, but had no further information at this time. The company added: “…we can confirm that Hotels.com closed its Russian point of sale on April 1, 2022, and no longer collects Russian user data,” as reported by U.S. News World Report[*1] .
Despite the big tech companies being fined for non-compliance, more than 600 companies have agreed to comply with Russia’s law, according to Anton Gorelkin, deputy head of the Russian parliament's committee on information policy.
According to Reuters, he wrote in a post on Telegram: "In the context of the information war with the West, we are convinced that this law was necessary. Only in this way can we be sure that foreign intelligence services and all kinds of fraudsters do not gain access to (the data)."
The fine isn’t the only financial setback for Match Group. In May, the company disclosed to investors that it would lose roughly $10 million per week in revenue due to the ongoing war in Ukraine. Match Group refused to pull its services from Russia in February when the war first began, even as more than 1,000 businesses announced they would discontinue operations there. The decision seems to have worked against Match Group.
According to The Dallas Morning News, chief operating and financial officer Gary Swidler told analysts on the investor call: “European performance was impacted by the Russian invasion of Ukraine, which reduced revenue in Russia, Ukraine and several other nearby countries.”
The company also expects to lose 200,000 paying users in the second quarter as a result of the war and the end of the discounts it offered on its star app Tinder. On top of this, Match Group expects to lose an additional $6 million in the second quarter due to changes in Google’s app store, specifically because the tech giant is requiring a fee for using their in-app payment system, similar to the App Store. The company filed a lawsuit against Google for this practice.
Match Group’s second quarter earnings call is expected to take place in early August.