What Threat Does Yandex Delivery Pose to Georgian Businesses?

A few months ago, Yandex became fully owned by Russian interests. This transition was welcomed by Russian government circles, as for them, Yandex is not merely a business.

Numerous articles and reports in both international and Georgian media have emerged discussing Yandex as a key tool of the Russian government, especially in areas where direct power is not visible. In fact, no one in Russia is hiding the fact that Yandex represents the country's so-called "soft power."

Recently, an official statement from a Personal Data Protection Agency in Georgia indicated that Russian authorities have direct access to the data collected and stored by Yandex. This raises serious questions about customer safety, particularly given that most citizens are unaware of the risks associated with using Yandex applications.

Previously, concerns were primarily related to the Yandex Taxi service in Georgia. The issues become even more complex when individuals use Yandex's delivery service, which has been operational in Russia for some time and is now set to launch in Georgia, offering food delivery.

Yandex's delivery service website has been actively recruiting couriers and offering various terms of employment. A few weeks ago, Newpost reported that several major businesses confirmed ongoing negotiations with Yandex. Among them, McDonald's was mentioned, although they later stated that they do not intend to collaborate with a Russian company.

"We were approached, but as it is a Russian brand, we cannot work with them... we have no intention of doing so," a McDonald's representative told Newpost.

Other businesses, including Kraftfood, Madarti, Zoomart, Louis Coffee, Machakhela, and DRO, have also stated, according to Newpost, that they do not plan to work with Yandex.

Another business, Tsitsila Grili & Bistro, stated that they are not collaborating with Yandex's delivery service and will never partner with a company that does not recognize Georgia's territorial integrity. They clarified that a similarly named restaurant in the app is not associated with them.

Collaboration with Yandex poses several risks for Georgian businesses. First and foremost, there are reputational risks, which we will discuss in detail below. It is well known that aggression toward such companies in Georgia is quite significant due to understandable reasons. Second, there are concerns regarding customer safety. Third, there are questions about the safety and security of the businesses themselves.

Entrepreneur reached out to representatives of several large businesses to inquire about any communication with Yandex and their general stance on collaboration. Carrefour, one of the largest hypermarket chains, confirmed they do not intend to work with Yandex. Similarly, the pharmacy chain PSP stated that this issue is not even up for discussion.

We also contacted the supermarket chain Spar, whose representative told us that they have no information about communication with Yandex and would inform the media of any decisions made.

When asked if there had been any communication with Yandex, a representative from Shaurma Club stated they were unaware of any such interaction.

Yandex's multifaceted operations in the country could lead to various security issues. Even when the company's shares were owned by a Dutch firm, Russia enacted a law granting its intelligence services continuous access to data stored by ride-hail companies. This law remains in effect today. Will this change apply in Georgia now that the company is fully Russian-owned? In 2023, when information about legislative changes emerged, the Personal Data Protection Agencyassured the media that Georgian users' data was protected. However, significant changes at Yandex have occurred since then.

Just a few days ago, on September 23, 2024, the Georgian Personal Data Protection Agency announced that it had identified a potential violation involving the illegal transfer of personal data to another country by RideTech LLC Georgia. This company provides Yandex taxi services.

Publication Publika reported that the Agency found unlawful transfer of personal data of Georgian users (passengers/drivers) via RideTech LLC Georgia to another country, the law on Personal Data Protection was violated, resulting in a fine of 4,000 GEL.

RideTech LLC Georgia announced that it would appeal the decision, claiming they have not violated any laws and operate in full compliance with Georgian legislation, with data stored on servers located in the European Union.

Similar to the taxi service, using the food delivery service requires sharing personal information such as name, address, geolocation, and banking details.

Notably, questions have been raised about Yandex Delivery's operations in European countries. For example, influential British publication The Guardian reported that UK parliamentarians called on the government to revoke Yandex's operating license following Russia's invasion in Ukraine in 2022.

Another incident that sparked significant outrage among the Georgian public involved a promotional banner released by Yandex Food, which displayed a map of Georgia with the territories of so called Abkhazia and South Ossetia covered by pizza and khinkali. This led to widespread protest on social media, prompting Yandex to later comment and deny any existence of such a banner, which was shortly removed after the outrage.

We will closely monitor how Yandex Food operates in Georgia and which businesses collaborate with them. Additionally, we aim to inform the public about the associated risks to ensure they remain aware and protected from potential threats.