VPN CEOs are making some services free in Russia because Russians have no way to pay
Since Russia invaded Ukraine one month ago, traffic to virtual private network (VPN) service Windscribe from users in Russia has increased by a factor of twenty, says Windscribe CEO Yegor Sak.
Canada-based Windscribe VPN lets users circumvent Russia’s tightening internet restrictions by masking their locations and hiding their identities, and Sak says the boom in Russian users is a positive development for his company even as other tech firms and multinationals race to cut ties to Russia over its Ukraine invasion. “Our mission was always to allow people to access information, no matter where they’re located,” he says.
Russian President Vladimir Putin’s authoritarian regime has clamped down on the country’s internet at an unprecedented pace to promote his narrative about Russia’s war in Ukraine, creating a ‘splinternet’ or ‘Digital Iron Curtain’ that partially separates Russia’s internet from the rest of the world’s. Shortly after Russia invaded Ukraine, authorities ordered internet providers to block independent media outlets as well as words like “war” or “invasion” from appearing in online stories. On March 4, Putin signed a law criminalizing anything the state deems ‘fake news’ about Russia’s invasion of Ukraine. The law threatens 15-year jail sentences for anyone who publishes narratives counter to the government’s version of events, which falsely treats the war as a ‘special military operation’ that will free Ukrainians eager for liberation. That day, Russia also banned citizens from accessing Facebook, Twitter, and Instagram. On Thursday, Russia banned Google News for showing articles contrary to Russia’s position on the war in Ukraine.
Some Western internet firms including Apple, Netflix, and Airbnb are voluntarily exiting Russia to avoid legitimizing Putin’s regime, leaving Russia more isolated from the rest of the world than it has been in over a decade.
Sak says some Windscribe users rely on the VPN service to read news and websites that challenge Russia’s state narrative about its invasion of Ukraine. Others are using it to access blocked social media sites such as Instagram and Facebook, he says.
“A lot of Russians are jumping in on the VPN train to get access to content that’s deemed fake in the country, meaning all the news that we [outside Russia] take for granted,” Sak says.
Many Western companies have abandoned the Russian market to avoid being complicit with Putin’s regime, but VPN firms are staying put. They see themselves as a last lifeline for Russians seeking information or connection to the outside world. VPN executives say they are determined to remain in Russia even if the Kremlin is bent on driving them out.
The Digital Iron Curtain
Almost unanimously, VPN companies tell Fortune that they have experienced a large uptick in usage since Russia invaded Ukraine.
“In the last three weeks, we’ve seen traffic to our website from Russia increase by around 650%,” says Harold Li, vice president of ExpressVPN, a VPN firm based in the British Virgin Islands.
ProtonVPN, a VPN service based in Switzerland, says that demand for its services has shot up by 1,000% since the invasion began. “I think the reason for the increase is quite clear…if you want to get independent, unbiased information in Russia then a VPN is necessary,” says CEO Andy Yen.
VPN firms report that the biggest spike in interest occurred after the Russia government announced on March 11 that it would ban the social media app Instagram. Russia’s government said it blocked Instagram and Facebook after Instagram’s parent company Meta announced that users in Ukraine could post messages on Facebook and Instagram urging violence against invading Russian soldiers.
That day, downloads of Lithuania-based VPN service AtlasVPN in Russia increased 10,000%. “It was a record day for our company,” says chief marketing officer Gediminas Galkauskas. Meta reports that there were 80 million Instagram users in Russia, equivalent to 55% of the country’s population.
But the booming market for VPNs in Russia comes as global tech firms pull out of the country in droves, wary of being connected to Russia’s war in Ukraine. “We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence,” Apple said in a statement.
VPN firms believe that they occupy a different position than other tech firms pulling out; they view their efforts to thwart government censorship as inherently antagonistic. “Where there is increased government activity in monitoring what people are doing online, we always see increase in VPN demand,” says Galkauskas. “It’s a very natural thing.”
VPN firms say they are not profiting from the spike in Russian demand; in fact, some are losing money.
On March 5, U.S. credit card companies Visa and Mastercard announced that they would suspend all operations in Russia in protest of Russia’s invasion of Ukraine. The move made it nearly impossible for Russians to pay for VPNs, or at least trustworthy VPNs located outside Russia, since it cut Russians off from making cross-border payments. Visa and Mastercard collectively handle 90% of credit and debit payments globally outside of China, leaving Russians with few options. Russians can still use the domestic Mir payment system, but it is only accepted in a handful of countries like Turkey, Vietnam, and Kazakhstan. China’s UnionPay system still works in Russia and 180 countries, but it has only recently become more popular among Russians.
Sak says that Windscribe has a free VPN option for Russian users, and that the company has tripled the amount of bandwidth it provides to free users in Russia as a result of the invasion. But due to the withdrawal of Visa and Mastercard, Russians are now effectively barred from Windscribe’s premium product, which costs $9 per month and gives users unlimited usage and more options for masking their location. “The only real option now is cryptocurrency,” says Sak. Windscribe accepts several cryptocurrencies including Bitcoin, Ether, and Dogecoin. “But [crypto owners] are only a very small percentage of people,” he says. U.S. investment bank Citigroup estimates that 11% of Russians own crypto.
Yen says ProtonVPN has let its premium subscribers in Russia, who paid for plans starting at $4 per month, keep their subscriptions free of charge.
“We are definitely not collecting any payments from users in Russia, and I don’t expect that we’ll be able to. But that’s obviously not the point,” says Yen. “Our mission is to make our VPNs available anywhere in the world, to anybody that needs it, whether they can pay or not.”
Another challenge for VPN firms is that Russia’s internet regulator has blocked 36,000 websites linking to VPN services in the last month, making it harder for users to find VPNs. Sak says that the blocks pose a “hinderance” but have not been “critical” so far, since Russia has only blocked sites linking to VPNs and not the actual VPNs.
Since 2019, Russia has banned over a dozen VPNs from operating in the country, and Russia says that only VPNs that comply with its censorship demands can legally operate there. VPN companies that are not banned in Russia do not want Russian authorities to target them, but say existing bans do not prevent people from using VPNs. “The scope of VPN bans are usually that they will filter the website, so you can’t get on the website with the VPN provider… But you don’t actually need to go on our website to start using our service,” says Sak.
The Iron Firewall
VPN firms expect demand for their services to increase further as Russia’s government continues to restrict internet activity in the country.
“I think a closed internet ecosystem is where Russia is heading,” says Yen.
Russia has been preparing to seal itself off digitally from the rest of the world for years. In 2019, Putin signed the Sovereign Internet Law, which prompted the Kremlin to build its own version of the internet that would operate separately from the rest of the global web. Last year, the Russian government carried out tests of its ‘Runet’ to see if it could function if Russia became completely disconnected from the rest of the internet. But the tests proved Russia still needed the wider web for internet access.
“While the network failed its testings in 2021, there is a high chance that by now it should be ready,” says Daniel Markuson, a digital privacy expert at NordVPN.
VPN companies point to China’s ‘Great Firewall’ as a model for the potential future of Russia’s internet. China’s government has blocked social media platforms like Facebook, Twitter, and Youtube and news sites like the New York Times for over a decade. China also constantly monitors Chinese platforms such as Twitter-like Weibo and messaging app WeChat for politically sensitive posts, removing some posts within seconds of publication.
Russian authorities may want to create a ‘firewall’ of their own, but they may not be able to match China’s control. Unlike Chinese internet users, Russians have grown accustomed to accessing Western social media platforms and news sites for years, making it less likely that ordinary citizens will tolerate the state’s effort to narrow the range of online platforms available to them.
“In China, they started the censorship process before most people got online… but in Russia they are already well connected to the rest of the internet,” says Yen. “The genie is out of the bottle.”
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