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The sale of Yandex is a weapon in the hands of the Kremlin

Thursday, 21 March 2024, 15:00

Who is behind the purchase of Yandex and how can Russian special services use the platform's services?

Recently, the temporarily existing Russian Federation has seen the largest capital outflow deal since the start of the full-scale invasion of Ukraine. It was the sale of its Russian share of the business, including the Yandex search service, by the Dutch company Yandex NV for $5.2 billion. 


Given that before Russia's invasion of Ukraine, Yandex shares were valued at about $30 billion, such compensation is a mockery of Russian businessman Arkady Volozh, the founder and former CEO of Yandex, who now shrugs off his Russian past in every way possible, lives in Israel, and lists his place of birth as Kazakhstan. 

He also asked for and achieved the lifting of international sanctions against him because he publicly condemned Russia's invasion of Ukraine. However, he did so only a year and a half after the invasion. Before that, for two and a half decades, he had been creating an ideal service for the Kremlin to spy on, influence media and control people, not only within the Russian Federation. 

It is today that Volozh loudly complains that he is just a businessman, an IT specialist, and a visionary who "wanted to create a truly independent service for Russia." And in 2019, his Yandex happily agreed to a restructuring that effectively subordinated the company to the Russian "Public Interest Fund," created to "protect the interests of the Russian Federation." 

Having substantial, if not complete, control over the largest media platform and database of most Russians, the Kremlin authorities have certainly taken full advantage of it, and continue to do so - and will continue to look for ways to do so outside of Russia. And also to use the services to serve its military-industrial complex.

So, who is listed in the company's release as a consortium of Yandex buyers in Russia? 

Even a superficial study allows us to understand where the Kremlin's guiding hand is sticking out of these puppets. 

Take, for example, Alexander Chachava, an entrepreneur and founder of the LETA Capital venture fund. Previously, he was a co-owner of Group IB, a cybersecurity company. 

One of the founders of this company was convicted of treason, and those who were not convicted were apparently taken by the gills. Not a very suitable background for an independent businessman-investor. 

It's even funny to mention others: these are, in particular, top managers of Lukoil, as well as former Gazprom executive Alexander Ryazanov and Saratov businessman Pavel Prass (who in 2021 bought out O2 ESTES, a company that controls part of the shares of the Sibur oil and gas company, from Putin's son-in-law, Kirill Shamalov). 

None of them looks like a person who is ready to shell out several billion, even in shares, just like that, which leads us to a completely logical assumption: these "IT businessmen" and "independent shareholders" are simply sitting ducks for the current Russian government, who need to look more or less decent in the eyes of the West. 

Interestingly, the deal to buy Yandex will be partially paid for with Class A shares and partially (at least half of the 475 billion rubles) in cash, and in Chinese yuan. 

Thus, both the composition of the investor-buyers and the nature of the deal itself suggest that it is the Kremlin that is buying Yandex from Volozh and other co-founders. This includes services operating outside Russia, in Kazakhstan, Uzbekistan, and some European countries. 

So, once upon a time, Volozh created a powerful digital weapon for the Kremlin, and he has just sold the rest of his shares directly to the Kremlin... and now, I bet he's whining to the EU to have the sanctions lifted, because he's no longer connected to Yandex and his hands are clean. 

Nevertheless, it's worth reminding you what Volozh created and why his "child" can be safely put on par with the products of the Uralvagonzavod tank plant or the Kalashnikov concern from Izhevsk. 

It would be extremely naïve to believe that in a KGB state, the largest information resource with a huge amount of data on citizens would have even a hint of independence. It would be equally naive to believe Volozh and his colleagues' story that it has only recently suddenly "become dependent on the state." 

No, from the very beginning, it was built to serve the diverse needs of the FSB and to be a terrible and extremely effective weapon in the hands of the Russian authorities.

The main services of Yandex, once partially and now completely subordinated to the Kremlin: 

- Yandex Search. You set up the algorithms in the right way, and articles from independent media will appear on page 10. But the first pages will show what is carefully censored. 

- "Yandex - Alice voice assistant". During the high-profile internal investigation into the data leak, Yandex directly confirmed the possibility of spying on users. 

Here are literally their words from the official commentary: "To improve the quality of the assistant and reduce the number of false positives, the beta version for employees uses a setting that turns on the device's microphone for a few seconds at random moments without mentioning Alice." It's ironic that Alice is voiced by the Russian actress who was the voice of Scarlett Johansson's dubbing of the KGB agent Black Widow. 

- Yandex Mail. Well, everything is clear here without further explanation, the phrase "anonymity of correspondence" in the Russian Federation is only a joke for stand-up.

- Yandex Food. It's a great way to find out people's names, surnames, places of residence and work, and the time of their lunch break or end of work. It was from this service that a seemingly accidental large "leak" occurred. 

- Yandex Taxi: an even better way to find out a person's route, place of work, favorite establishments, and workday schedule. By the way, this particular service officially cooperated with sanctioned Russian military-industrial enterprises that produced weapons for the war with Ukraine (Sverdlov Plant, Perm Powder Plant, Special Technological Center LLC, etc.)

- Yandex Maps and Navigator. Believe it or not, some unwitting Ukrainian drivers still use them through VPNs, "because it's convenient." And this is literally an opportunity for Russian special services to get real-time information about the movement of equipment or sensitive facilities in Ukraine. 

And all of this is conveniently stored in three huge FSB-controlled data centers in Russia. It looks no less titanic than the notorious Great China Firewall, which completely controls the Chinese Internet and the communications of its citizens with the outside world.

In an interview with Forbes, Arkady Volozh once said: "...the creators of Yandex believed that they were building a new Russia - open, progressive, integrated into the global economy." But something went wrong, and "the pressure on Yandex from the authorities increased." 

Interestingly, the owners were not too worried about this pressure before. Back in 2009, Yandex sold one so-called golden share to Sberbank, Putin's subordinate apparatus, for 1 euro, which gives extremely broad powers to control the company's stakes (and therefore most decisions). 

So for more than 10 years, the co-founders of Yandex were satisfied with this situation and this cooperation with the state apparatus, until the smell of sanctions came. Putin made a personal visit to Yandex in 2017 to meet with them about the development of Alice, which can turn on microphones on users' smartphones without permission. 

The company's decision to cut off the wallets of oppositionists in 2017 was fine with him. The invitation from Putin to a meeting of IT investors in 2020, to which Volozh came all the way from Israel, was fine. Suddenly, he harshly condemned the war and said that Yandex was just a product IT company. 

No, for the Russian Federation, Yandex is a quasi-media that is equal to or larger than the central Russian channels in terms of audience, and it also feeds its users with propaganda. If sanctions apply to Solovyov, Simonyan, and Russian arms manufacturers, why should they NOT apply to the creator of a structure that fully controls the Internet use of millions of Russians and leaks absolutely all data about them and European users directly to the FSB in real time?

For Europe, Yandex is a direct threat to national security. Until recently, the Yango service (taxi, delivery and food delivery) operated in 16 countries, including some European ones. 

The Latvian and Estonian governments banned its operations in March 2022 for security reasons. And after sanctions were imposed on Volozh, Yango suspended or limited its operations in Britain, France, and some Scandinavian countries.

From the point of view of state security, Yango's work in conventional Finland, which has recently become a NATO country, is trash. We track the names and payment cards of people who come to the NATO headquarters or the US embassy to work every day, for example. 

We track where they live, what schools and kindergartens they pick up their children from, and what bars they go to after work. A bit of an unpleasant feeling, isn't it? The clean Finnish air suddenly smells like the poison of a "newcomer" or blackmail from a top-level diplomatic mission. 

If that's not enough, here's a little more about Yandex: it releases pirated movies and music on its official platforms. It is related to the supposedly independent search service Uploads interesting applications to Google Play, such as AppMetrica, which spy on smartphone users (in particular, in Ukraine) and leak their data to a clear destination. 

Do you also remember the app that made your photo into an older or different gender version of you? Well, the developer of FaceApp is a former Yandex employee, a Russian named Yaroslav Goncharov. 

The app collects selfies and other data about the user and does not guarantee the security of their storage (unless the FSB servers can be considered a safe enough place to store them). At least the US FBI decided that this app was worthy of their official statement about the potential threat of data leakage to Russian special services. 

In view of all this, it is not only necessary to keep European sanctions on Volozh, but also to impose all possible additional restrictions on him and all services related to the Yandex code and closely monitor any future activities, regardless of who officially sold what to whom. 

It would be nice if attention was paid to all those involved in Yandex in the United States. The only office of this FSB search engine there was closed back in 2015, but at the same time, an entire division of Yandex, which deals with self-driving cars, operates there under the Avride brand. 

Will we see the moment when Western civilization sees that everything created by Russians, from literature to software, ultimately turns out to be a tool for working for Uncle Major? I don't know, but I am sure that Ukraine must tirelessly talk about this on all available platforms and not allow rats like Volozh to even dream of lifting sanctions.

Disclaimer: Articles reflect their author’s point of view and do not claim to be objective or to explore every aspect of the issues they discuss. The Ukrainska Pravda editorial board does not bear any responsibility for the accuracy of the information provided, or its interpretation, and acts solely as a publisher. The point of view of the Ukrainska Pravda editorial board may not coincide with the point of view of the article’s author.

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