October 23, 2018 / 11:43 AM / 9 months ago

UPDATE 1-Kremlin backs plans to curb foreign ownership of online news aggregators

(Adds Kremlin quotes, background)

MOSCOW, Oct 23 (Reuters) - The Kremlin said on Tuesday that a new draft law proposing to limit foreign ownership in online news aggregators in Russia was justified, a day after shares in Russian search engine Yandex fell on reports about the plan.

Lawmakers propose limiting foreign ownership in online news aggregators to no more than 20 percent for security reasons, making them subject to restrictions similar to those faced by Russian media, according to the text of the draft law.

Shares in Yandex N.V. , the parent company of Yandex group which is registered in Netherlands, fell almost 2 percent in Moscow on Monday following a report on the proposals.

Asked on a conference call with reporters if the Kremlin thought the legislation was justified, spokesman Dmitry Peskov said “yes”, adding that it still needed to be worked on further.

“The fact is that aggregators which cover a certain amount of users, can in one way or another be equated to mass media in the view of experts,” Peskov said.

The text of the draft legislation said there was a “threat to public order” from the “ability of foreign states or persons controlled by them to manage the process of disseminating information in Russia.”

Yandex is Russia’s biggest internet search engine with around a 56 percent share in Russian search traffic and also the biggest news aggregator compared with rivals Google and Mail.Ru.

Asked if the legislation would affect Google’s news service, Peskov said “I can’t tell you now.”

Interfax news agency, citing a source, said on Monday that Google news aggregator in Russia would not be affected.

Yandex shares, which were 3 percent higher earlier on Tuesday, fell back after Peskov’s comments. They were around 2 percent higher at 1036 GMT. (Reporting by Polina Nikolskaya and Katya Golubkova; writing by Tom Balmforth; editing by John Stonestreet and Jane Merriman)

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