(Bloomberg View) -- Imagine if the U.S. banned Facebook after Mark Zuckerberg's disappointing performance last week on Capitol Hill. Something similar happened in Russia on Monday as the country's internet censorship agency, Roskomnadzor, ordered internet providers to block access to the Telegram messenger.
This being Vladimir Putin's Russia, the ban isn't just an attack on the freedom of communication and expression: It happens to benefit the business of a Kremlin-friendly billionaire.
According to App Annie, Telegram and Facebook-owned WhatsApp compete for first place in social networking app downloads in Russia. With a Russian user base of 15 million, it is rapidly catching up to the much older Facebook, which has about 25 million users. Developed by a predominantly Russian team headed by the brothers Pavel and Nikolai Durov, the feature-rich app, used by people in the government as much as the liberal opposition, ought to induce Russian national pride. Pavel Durov is as much of an icon to young Russians as Zuckerberg is to young Americans.
Unlike Facebook, Telegram's business isn't based on collecting user data for targeted advertising. It's actually operating as a nonprofit so far. Pavel Durov, who had previously built Russia's largest social network, Vkontakte, wants to turn Telegram into a blockchain-based economy for its more than 200 million users. To that end, he launched the world's biggest initial coin offering, raising $1.7 billion so far. There are already strong indications that Telegram can function as an economic ecosystem: Thousands of people have commercialized and monetized their Telegram channels. These businesses are now threatened by the Russian government's harsh action.
Russian regulators' problem with Telegram is also different from the one U.S. regulators have with Facebook: The messenger is too privacy-minded for them. Russia's domestic intelligence, the FSB, last year demanded that Telegram hand over its encryption keys, as the nation's repressive internet law requires. Durov has refused. He wrote on his Telegram channel:
The shutdown, which was ordered Friday by a Moscow court, has led to a torrent of the foulest Twitter abuse aimed directly at Roskomnadzor. Many users installed virtual private networks to bypass the block, some for the first time. But that is a fragile workaround: Russian law enforcement agencies are allowed to shut down VPNs if they provide access to banned sites, though they haven't done so thus far.
Anton Protsenko, who runs the Telegram Marketing channel, has predicted that the government ban will cut the messenger's Russian audience by half, after which it will rebound to 70 percent. That's probably overly optimistic. It assumes millions of people will pay for commercial VPNs or accept a much slower internet via free proxies just to avoid switching from Telegram to other messengers. These are not being banned, even though WhatsApp hasn't handed over its encryption keys, according to Roskomnadzor.
Pavel Durov hinted on Twitter that other messengers may be less adamant than Telegram about protecting privacy. "It is telling that authoritarian governments (e.g. Russia) are trying to block Telegram over encryption, but are more relaxed when it comes to other encrypted messaging apps," he wrote. But it's still possible, of course, that the government will eventually move to block messenger apps based in the West.
There are signs, however, that the Telegram ban is not limited to the FSB's surveillance needs. It's also creating unfair competition among messaging services.
Earlier this month, Herman Klimenko, Putin's internet adviser, recommended that Telegram users switch to ICQ. That messaging service reached its peak at the turn of the century and was acquired by the Russian company Mail.ru in 2010, long after its fortunes waned. "I like ICQ," Klimenko said. "It's a fully functional messenger that is by no means inferior to Telegram from an ordinary user's point of view." Though Klimenko later said that he'd only meant it as an example, Putin's press secretary Dmitri Peskov announced that he was trying ICQ. Kremlin staffers, he said, would soon choose an alternative to Telegraph for their daily use.
A month ago, according to App Annie, ICQ was the tenth most downloaded social networking app in Russia. It is now in fifth place. Another Mail.ru-owned messenger, TamTam, was the 51st most downloaded app in the category a month ago. It stands at 11th place. Regardless of whether Telegram is actually accessible to Russians, Mail.ru is benefiting from the government's move.
Mail.ru is controlled by Megafon, a cellular operator which, in turn, is controlled by Alisher Usmanov, one of Russia's richest men and a strong Putin loyalist. Vkontakte, which founder Pavel Durov exited after Usmanov acquired a share, is part of Mail.ru.
Telegram was the biggest competitor to Mail.ru's messenger apps because many Russians prefer Russian internet services to U.S. ones. Russia is the only country where search and social networking aren't dominated by Silicon Valley companies. And -- perhaps coincidentally -- Telegram stands as the only app banned for not turning over encryption keys.
That's how Putin's Russia operates: It's never clear whether government moves are part of a conscious policy or a business undertaking. Sometimes, it's a little of both. Lost somewhere in the process are the millions of ordinary users: Their interests aren't even a consideration.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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