Russia Purports to Build a Fully Controlled, State-Run IT Ecosystem

IT-engineers working under the close control of the Russian state are building an app which is very similar to China’s superapp WeChat. Along with an array of other digital services potentially to be used by every citizen, this tool will help the authorities monitor and influence the lives of Russians.

At the center of this effort is VK Company, a conglomerate of digital services. Starting from an email service, Mail.ru, this entity grew to become the parent company to VKontakte, Russia’s largest social network. The network, resembling Facebook in its functionality, was originally developed independently, but gradually came under the control of Kremlin-connected business interests.

VK combines a whole array of services under its umbrella: Odnoklassniki, Russia’s second largest Russian social network, Mail.ru (email services), educational software companies, payment services, and e-commerce companies.

The Uzbek-Russian oligarch Alisher Usmanov once owned Mail Group. In 2021, he transferred part ownership to the state-linked entities Sogaz (an insurance company), Gazprom Media Holding, and Rostec, which collectively ended up owning 57.3 percent of VKCompany’s voting rights. This means that the Russian state effectively owns VK Company through a complex ownership structure.

The people running the company did not get there by accident. VK Company’s CEO is the forty-year-old Vladimir Kiriyenko, who previously worked as vice-president at the Russian state-owned company Rostelecom. More important is that he is the son of Sergei Kiriyenko, Putin’s chief campaign manager responsible, among other things, for political control over Russia’s “new territories,” that is, Ukrainian territories occupied by Russia.

The vice president in charge of VK’s media strategy is the twenty-nine-year-old Stepan Kovalchuk, scion of one the families closest to Putin. Stepan’s father, Kirill Kovalchuk is the nephew of Yuri Kovalchuk, a personal friend of Putin’s who is a major shareholder in Bank Rossiya, one of the most important assets in the Kremlin-connected business networks.

VK’s Growth Spurred by the War in Ukraine

VK has significantly benefited from the war because of the ban on U.S.-based social media platforms in Russia. After the invasion of Ukraine, Meta’s networks were labeled extremist, leading to an increase in VKontakte users of almost four million in three weeks. In the first quarter of 2023, VK reported a revenue surge of nearly 40 percent, reaching RUB 27.3 billion. Online advertising revenue soared by 67 percent compared to 2022, and even doubled in the segment of small and medium-sized businesses. VK’s social networks and content services revenue grew by 46.7 percent, driven by a notable increase in video content consumption, with users watching three billion videos daily.

VK’s strong presence in education is notable, supported by agreements with the Russian Ministry of Education and the Ministry of Digital Development. VK Company’s services, including VK Messenger and VK Calls, are integrated into educational communication interfaces, and VK has acquired educational platforms, expanding its influence in the sector. Children from a young age will now be swept up in the state-owned ecosystem.

VK’s Superapp Mimics China’s Ubiquitous Superapp, WeChat

WeChat, developed by Tencent in 2011 initially as a messaging app, has evolved into a social media hub, a financial platform (WeChat Pay), and an e-commerce facilitator. Its mini-apps offer diverse services, from gaming to utilities, all within the app. WeChat fosters personal and professional connections, serving as a primary communication tool and a source of news and information. Its seamless integration into various aspects of life, including work and government services, has reduced the reliance on multiple apps, making it an indispensable tool for millions in China.

Its dangers lie in its storing extensive personal data and allowing the state access to citizens’ profiles, including political leanings, financial details, and medical records. WeChat’s compliance with Chinese laws and censorship grants the government significant control, exemplified by its AI, which automatically deletes politically sensitive content, a feature absent from encrypted platforms such as WhatsApp or Signal. During the 2022 protests against COVID-19 measures, the state blocked dissenters on WeChat, isolating them from society. The app’s ubiquity thus gives the government a powerful tool to suppress opposition, as being banned from the app implies exclusion from crucial social interactions.

VKontakte, stating on its website that it aims to become a superapp, is expanding its services beyond being a social network, similar to WeChat’s multifunctionality. In addition to messenger, calling, and payment functions, VK integrates mini-apps offering gaming, taxi and food ordering, money transfers, and concert ticket purchases. Significantly, parts of Russia’s state services platform, Gosuslugi, are being integrated into VK. With nearly 100 million Russian users, Gosuslugi handles administrative tasks such as passport applications, vehicle registration, tax declarations, and military call-ups. VK allows users to book doctor’s appointments, display electronic driver’s licenses, pay police fines, and access pension information. The integration also allows VK account verification through Gosuslugi, potentially becoming mandatory, providing the Russian state with increased access to citizens’ personal data. Notifications from Gosuslugi can now be received directly in the VK app and messenger.

A Cunning Strategy

The Russian state’s strategy on its digital platform is shrewd: by enhancing the convenience of a service, authorities effectively compel people to use it. This widespread adoption is advantageous, especially in light of the state’s control and the placement of pro-Kremlin people in critical positions, enabling influence on an unprecedented scale. Studies have revealed the dissemination of propaganda on VKontakte. Increased user interaction will likely make people more susceptible to such propaganda.

The state is employing subtle tactics to boost the app’s popularity, and the integration with state services provides the authoritarian regime with novel opportunities. The superapp consolidates a comprehensive registry encompassing political affiliations, health records, biometrics, and financial data.

Many Russians may unknowingly trade their data for convenience, a phenomenon not exclusive to Russia but also pertinent to Western societies. But in the West, the potential for companies to abuse their positions is tempered by institutions that monitor and penalize misconduct. However, challenges persist, such as the contentious issue of wiretapping. The critical distinction lies in the rule of law. The United States and the EU maintain this safeguard, whereas it is conspicuously absent in Russia.

It is universally acknowledged that constant supervision of big tech’s use of data is essential, yet the absence of the rule of law in Russia amplifies concerns about unchecked power and potential data misuse. And so VK and its superapp is the next trump card in the Russian authorities’ propaganda and intelligence arsenal. And just as with all the other tactics the authorities employ, many Russians will think they are acting in citizens’ best interest.

This is an abridged version of a paper published by the German Council on Foreign Relations (DGAP). 

The opinions expressed in this article are those solely of the author and do not reflect the views of the Kennan Institute