Russian Email Giant Takes Over VKontakte, 'Russia's Facebook'



Russian President Vladimir Putin poses for a photo Russian billionaire tycoon Alisher Usmanov, right, during Kremlin awards ceremony on Tuesday, Oct. 29, 2013.
Russian mail provider Mail.Ru, which is majority owned by Russia's richest man and a close ally of President Vladimir Putin, has taken full control of the country's Facebook equivalent VKontakte on Tuesday.
Mail.Ru announced the acquisition of the remaining 48% of VKontakte (also known as VK) — the part which it still didn't control — for $1.47 billion. The deal gives Mail.Ru full control of Russia's largest social network, and gives its owner, Alisher Usmanov, more control over the company. This renews concerns that what was once a platform for dissent and independent voices will now be under the influence of Putin's tightening grip on Internet freedom in Russia. deal "is another development toward an increasingly restricted online sphere in Russia," according to Laura Reed, a research analyst at Freedom House, a human rights watchdog.
"Given that the new owner of VK, Alisher Usmanov, has close ties to the Kremlin, it seems far less likely that the company will make an effort to resist government pressure in order to protect the rights and privacy of their users," Reed told Mash.
The deal also puts an end to a legal dispute over VKontakte's control that arose in April of 2013 when investment fund United Capital Partners (UCP) bought a 48% stake in the company.
The concerns over VKontakte's independence started simmering in January, when the company's founder, 29-year-old Pavel Durov, sold his remaining stake to Ivan Tavrin, chief executive of telecom provider MegaFon, a company also controlled by Usmanov. This sale already gave Usmanov the effective control of VKontakte, with 52% of the company's shares.

"The goal of this deal was to put [VKontakte] under the control of businessmen who are friendly to the Kremlin," Nickolay Kononov, the author of a biography on Durov and editor in chief of Russian business news siteHopes & Fears, told The Verge at the time.

Pavel Durov

Pavel Durov, founder of VKontakte's, speaks during TechCrunch's Disrupt Europe event in Berlin, Germany, in 2013.

Then in April, Durov resigned from VKontakte, citing pressure from the new owners to change the companies founding ideals, including its support of freedom of speech and privacy.
"As a result of events subsequent to the change in the shareholding of VKontakte in April 2013, the freedom of the CEO to manage the company has been significantly reduced," he wrote in a post on VKontakte's page.
"It’s becoming increasingly difficult to defend those principles, which were once laid in the foundation of our social network," he continued.

Durov later said the Russian security service the FSB had asked the company to turn over the personal data of Ukrainian protesters in December 2013 — a request Durov said he refused.
Referring to his resignation, Durov wrote in a post that he "had to sacrifice a lot, including my shares in VKontakte."
"But I do not regret anything — protection of the personal data of people is worth it and much more," he continued. "Since December 2013 I have not had property, but I still had something more important — a clean conscience and ideals that I am willing to defend."
With Mail.Ru's effective and complete takeover, those ideals are gone, according to Internet freedom advocates.
"If Russia ever had a free and open internet, that ship has sailed," Peter Micek, a senior policy counsel at digital rights organization Access, told Mash. "With this move, the deck chairs have been officially rearranged in Usmanov (and Putin's) favor, and users should be very wary of putting sensitive data onto the platforms."
This story has been updated to include Peter Micek's comments.




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