Warnings raised over Russian tech giant Yandex’s UK operation

The government has been urged to restrict the UK operation of Russia's biggest technology company amid concern over its ties to the Kremlin.

Yandex, Russia's equivalent to Google, is headquartered in Moscow but operates in more than 17 countries and recently launched Yango Deli in London, a service offering 15-minute delivery to households of food, alcohol and toiletries.

The parent company, which offers map, search, taxi and shopping services, has been subject to sanctions in Ukraine since 2017 following the 2014 annexation of Crimea.

Last Monday, the Lithuanian government requested that the Yandex taxi app be pulled from the Google and Apple stores, saying it "threatens national security", Reuters reported.

Uber also announced last week that it was seeking to "accelerate" the sale of its stake in a joint venture with Yandex, which is legally headquartered in the Netherlands but has its main offices in Russia.

But the tech giant, founded by Arkady Volozh, one of Russia's wealthiest businessmen, has not been subject to sanctions or scrutiny in the UK - and Yango Deli, which was launched in London in October, continues to operate as usual.

The grocery app, one of several ultra-fast delivery services to have arrived in the capital in recent months, sells 2,500 items, including fresh fruit and vegetables, Hovis bread and Ben & Jerry's ice cream, as well as running seasonal promotions, such as a 15-minute tree delivery at Christmas and red roses for Valentine's Day.

It has ambitions to expand: it is currently running ads on the Apple store and ultimately wants to achieve "nationwide coverage", the company's UK manager, Evgeny Chernikov, said in December. On 21 February, a few days before Putin's invasion of Ukraine, Yango Deli announced on Instagram that it was expanding into three new areas of London.

MPs and analysts have expressed concern over the company's presence and urged Downing Street to restrict Yandex's UK operations. Its value has plunged since the invasion but it had an estimated market capitalisation last year of $27bn (£20bn).

Several Russian companies, including Aeroflot, the national airline; Rostec, Russia's largest defence company; and the gas giant Gazprom have faced sanctions in the UK so far, but technology companies such as Yandex have received little attention.

Layla Moran, foreign affairs spokesperson for the Liberal Democrats, likened the company to China's Huawei, which was banned from Britain's 5G network amid national security concerns, and said that its UK operation needed to be looked at urgently.

"The government currently says that any company that is in any way propping up the Putin regime is potentially on the sanctions list," she told the Observer. "If that's the case, this company potentially squarely falls into that."

"The Foreign, Commonwealth and Development Office needs to be looking at this company as part of its suite of sanctions," she added.

Yandex is seen as having strong links to the Kremlin despite its US listing and formal Netherlands registration.

In 2019, it agreed to a corporate restructuring that granted a veto over key decisions - such as those covering the security of personal data and intellectual property - to a government-linked body whose goal was to "defend the country's interests", the Guardian reported.

The technology company has also been accused of stifling the flow of information about the war in Ukraine to people living in Russia. According to Russian law, results from the Yandex News search engine can include only publications officially listed on the national media watchdog's register, restricting news from the outside world.

Last week, Lev Gershenzon, Yandex's former head of news, accused the company of being a "key element in hiding information" from Russians about the war, and urged people working there to quit.

Security experts have also raised concerns about the company's collection of vast amounts of personal data, including customers' names, geolocation, address, phone number and browsing history, according to the privacy policy that users agree to when they sign up.

Yango Deli customers in the UK are told that by using the service, they provide their "express and unambiguous consent" for the information to be transferred to Russia, where data protection is weaker.

Analysts said there was the potential for data to be weaponised by Putin in future, including for coordinated disinformation campaigns or targeting people on UK soil.

In 2020, it was reported that Yandex had pulled employees out of its office in Minsk, Belarus - a key ally of Russia - after the Belarusian security services raided its premises amid ongoing unrest in the country. Sources told Russian news outlet the Bell that the raid was an attempt to obtain data about passenger trips taken with Yandex Taxi, the Moscow Times reported.

Sergey Sanovich, at the Center for Information Technology Policy at Princeton University in the US, said Yandex was "innovative" and full of "talented people" who were "staunchly anti-war", but that it, like all companies in Russia, was ultimately at Putin's mercy. "The problem that Yandex has is that the Russian security service can demand access to any server located in Russia," he said.

Keir Giles, a senior Russia fellow at the international thinktank Chatham House, urged the government to assess the potential threat from Russian tech companies in the UK, saying: "People are not aware of how much data they are spreading around whenever they use an app." The problem arises when it is a hostile state that wishes to cause us damage and is interested in specific individuals they wish to track in this country," he said.

"It has the potential to be weaponised against anybody. Do we want, at a time when Russia is considering the UK as an enemy, to be providing all our personal details to a server in Moscow?"

Yandex declined to comment on the calls for sanctions but said Yango Deli UK remained "dedicated to providing high quality ultra-fast grocery delivery to Londoners".

In a statement, the company said UK customers' information was processed in line with relevant regulations and EU-approved standards and that "the privacy of users' data" was the "utmost priority", adding: "Any data can only be sought from Yango Deli UK via a formal request to UK-based Yango Deli Limited, and only by following established international practices and channels."

"We are wishing and praying for peace to be restored as soon as possible," a spokesperson added.

The Foreign, Commonwealth and Development Office said: "We will not speculate on future designations."