State Duma approves law suppressing forced collection of personal data

A draft law (the “Law”)[1] providing for amendments to the Law “On Protection of Consumer Rights”[2] has been submitted to the State Duma. According to the State Duma’s website,[3] the Law is scheduled to take effect on 1 September 2022. The purpose of the Law is to limit forcible, non-transparent or unintentional collection of consumers’ personal data for purposes unrelated to the conclusion and execution of a contract.

With the adoption of the Law, entrepreneurs will not be able to refuse to enter into a contract with consumers who have declined to provide personal data. These changes are also based on the principle of freedom of contract, according to which individuals and organizations are free to determine the terms of the contract. The exceptions are cases where Russian Federation laws require that data be provided (for example, giving residential addresses when consumers get electricity) or directly related to the performance of the contract with the consumer.

Now consumers have the right to request information about the reasons and legal grounds for a contract being concluded or not if personal data are not provided. The seller must provide such information in writing within seven days of the consumer’s request, and immediately if the consumer requests the information orally.

Sellers’ liability for refusing to enter into a contract because a consumer doesn’t provide personal information has yet to be determined. Under the amendments to the Administrative Offences Code,[4] the penalty for refusal to enter into, perform, amend or terminate a contract with a consumer because the consumer doesn’t provide personal data shall be from five to ten thousand rubles for officers, and from thirty to fifty thousand rubles for legal entities.

The Law aims to strike a balance in the relationship between the consumer and the seller, as the consumer is in a vulnerable position to begin with. The Law will also cut back on the practice of inadmissible terms, which are often challenged in court, being included in contracts.

Author – Vera Zotova, Senior Associate in the Intellectual Property and Information Technology Practice at Nordic Star Law Offices vera.zotova@nordicstar.law

[1] URL: https://sozd.duma.gov.ru/bill/1184356-7. / Draft Law No. 1184356-7 of 1 June 2016 “On Amendments to Article 16 of the Russian Federation Law ‘On Protection of Consumer Rights’”. URL: https://sozd.duma.gov.ru/bill/1184356-7.

[2]  Russian Federation Law No. 2300-1 of 7 February 1992 “On Protection of Consumer Rights” (as amended on 11 June 2021)

[3] http://duma.gov.ru/news/54119/

[4] Draft Law No. 1184517-7 of 1 June 2016 “On Amendments to Article 14.8 of the Administrative Offences Code of the Russian Federation (Stipulating Administrative Liability for Refusal to Enter into a Contract with a Consumer for Declining to Provide Personal Data)”, URL: https://sozd.duma.gov.ru/bill/1184517-7.