{"id":3505,"date":"2022-04-01T00:30:51","date_gmt":"2022-04-01T00:30:51","guid":{"rendered":"https:\/\/filter.watch\/en\/?p=3505"},"modified":"2022-04-01T00:31:57","modified_gmt":"2022-04-01T00:31:57","slug":"disruption-of-irans-private-tech-sector","status":"publish","type":"post","link":"https:\/\/filter.watch\/english\/2022\/04\/01\/disruption-of-irans-private-tech-sector\/","title":{"rendered":"Disruption of Iran’s Private Tech Sector"},"content":{"rendered":"

The growth of Iran\u2019s tech startup community, once observed with awe due to its exponential growth which began around a decade ago, has been experiencing a slow-down. A contributing factor has been the increasingly apparent pressures exerted by Iranian authorities in order to bring the country\u2019s private tech sector further under government control, with news of arrests and blockings becoming public regularly. At the same time, the private tech sector has also been feeling the impacts of sanctions through limited access to global tech and international investments. Despite these multiple pressures, this sector of Iran\u2019s digital ecosystem has managed to secure relative successes in the form of video streaming services, ridesharing apps, and e-commerce, drawing in vast numbers of Iranian users, and solidifying their positions as fixtures of daily Iranian life.\u00a0<\/span><\/p>\n

With the increased influence of online services provided by the private sector in Iran, more glaring signs of a new phase of internet controls aiming to mould the influence of this sector for the aims of Iranian authorities are also emerging. Following the last decade of planning and investment into infrastructure and connectivity, along with more cohesive policy planning for Iran\u2019s internet localisation plans under the National Information Network (NIN), the next stage of this process will naturally be aimed at user-facing content and services, placing greater emphasis on domestic platforms to control Iranian\u2019s online behaviours.<\/span><\/p>\n

Over the past two years, we have witnessed increased challenges brought by authorities on Iran\u2019s private tech sector by forcing them to conform to vague, opaque, and outdated rules and legislation and threatening their freedoms. However, these actions need to be balanced against opportunities for sustaining the growth of the private sector, revealing that the path for the realisation of the Iranian government's goals is not straightforward. This tension leaves a gap for resistance against Iran\u2019s internet controls by the private tech sector, however, this opportunity should be viewed with an awareness that these opportunities are quickly fading.\u00a0<\/span><\/p>\n

In this edition of Filterwatch, we look at how further government entanglements with Iran\u2019s private sector are working to crackdown against this influential group, and how this process is shaped by the architecture of the NIN. With the prospects of the so-called \u201cUser Protection Bill\u201d being passed into law, the influence of Iran\u2019s private tech sector in shaping Iran\u2019s information controls is now more crucial and important than ever.<\/span><\/p>\n

\u201cBoom and Bust\u201d\u00a0<\/b><\/p>\n

Over the past decade, government investments and support such as the Startup Action Plan <\/span>ratified<\/span><\/a> by President Hassan Rouhani\u2019s government in 2019, offering tax incentives, supporting R&D along with initiatives from universities, alongside long term investments in Iran\u2019s previously straining internet infrastructure which began around a decade ago have increased connectivity and speeds, propelling Iran\u2019s long overdue digital expansion forward at great speed.\u00a0<\/span><\/p>\n

The emergence of food delivery services, ride sharing apps such as Snapp and Tap30, and e-commerce sites such as Digikala, the Android app store Cafe Bazaar, and streaming and video services such Aparat slowly and surely became vital to meeting Iranian consumers and internet users needs. According to <\/span>Alexa<\/span><\/a>, Aparat and Digikala hold the ranks of the second and third most popular websites in Iran respectively following Google. However, it should be noted that many Iranians use VPNs to gain access to international services therefore this data is naturally skewed towards domestic and filtered content, and an accurate picture of data use in Iran is difficult to capture for the same reason. Cafe Bazaar <\/span>claims<\/span><\/a> to have over 49 million active instals and the ride sharing and delivery app Snapp states that they <\/span>operate <\/span><\/a>across almost all of Iran\u2019s provinces.\u00a0<\/span><\/p>\n

These tech companies are all nearing, or have surpassed a decade in age, and instead are now focused on enhancing and improving their services having already established themselves in Iran\u2019s tech ecosystem. Alongside years of harsh financial sanctions innovation has for now lost its momentum, despite these challenges, as Iran\u2019s private and semi-private tech sector takes a more defined shape, we are also entering a new phase in Iran\u2019s internet localisation plans under the National Information Network (NIN).\u00a0<\/span><\/p>\n

Private Tech and the National Information Network\u00a0<\/b><\/p>\n

Policy planning for the NIN has continuously referenced participation from Iran\u2019s private sector. This involvement has mostly been focused on the content and services layer of the NIN, set to create a technology ecosystem which Iran\u2019s top Internet policy making body, the Supreme Council for Cyberspace (SCC) calls \u201ccompatible with Iranian-Islamic values\u201d in its 2020 <\/span>\u201cNIN Architecture\u201d resolution<\/span><\/a>. Of course, the NIN\u2019s aims go beyond this; the localisation of data processing and storage inside Iran to give further control to Iranian authorities over its citizens' online behaviours, and reduce the cost of internet shutdowns by using localised infrastructure to allow them to <\/span>remain online<\/span><\/a> while international services are blocked. The increased internet penetration rates in Iran have brought a new wave of Iranians online for authorities to surveil and control.\u00a0<\/span><\/p>\n

While some members of Iran\u2019s private sector have retained their independence by forgoing government support and refrained from too much involvement with the authorities, the line between Iran\u2019s private and public tech services remains somewhat blurry. Factors such as the government monopoly over internet service providers, for example, and a number of companies collaborating closely with the government in exchange for cash injections and favourable treatment for complying with government requests contribute to this fact. The foundations for further support for the tech sector were laid during the Rouhani government and his ICT Minister Mohammad-Javad Azari Jahromi, under whom the Arvan Cloud\u2019s contract with the ICT Ministry for the Iran Cloud project was signed, which received widespread criticism for taking part in internet localisation plans. Initiatives such as financial support for Iranian mobile phones - a crucial development for both the NIN and layered filtering - was introduced under Jahromi has been confirmed to go ahead now under the new ICT Minister Eisa Zarepour, who also recently <\/span>created<\/span><\/a> the \u2018Digital Economy Working Group\u2019 to bring the digital economy to 10% GDP.<\/span><\/p>\n

Some others have chosen to retain as much of their independence as possible but developments over the past two years and pressures from authorities mean that this gap is closing quickly.\u00a0<\/span><\/p>\n

Arrests, Blockings, and Threats: The Shrinking Private Tech Sector\u00a0<\/b><\/p>\n

The regulation of Iran\u2019s digital economy is subject to unclear, outdated, and opaque laws and regulations. These shortcomings and lack of clarity have created conditions where Iran\u2019s tech sector can be wrongfully penalised and restricted by authorities whenever they deem it necessary without making available appropriate defences.\u00a0<\/span><\/p>\n

Contending with intermediary liability has been a major issue with platforms hosting user generated content not just in Iran, but also globally. Iran\u2019s Computer Crimes Law (2009\/2010) sets out that online businesses will be liable for \u201cillegal\u201d content which can lead to their closure. This provision is far too ambiguous and outdated as evidenced by examples below and it is unclear how legislation is being applied.\u00a0<\/span><\/p>\n

Complex licensing requirements without appropriate communication to online businesses continue to be an issue where online services are blindsided by licence requests from authorities only to be blocked at short notice.\u00a0<\/span><\/p>\n

In October 2020 Mohammad Javad Shekuri Moghadam, the Managing Director of Aparat, was <\/span>sentenced<\/span><\/a> to twelve years imprisonment including for \u2018encouraging corruption\u2019, one year for \u2018propaganda against the system\u2019 and one year for \u2018publishing vulgar content\u2019. The sentence appeared to be in connection with a video uploaded on Aparat by a user channel.\u00a0<\/span><\/p>\n

Just a few months later in December, Mostafa Amiri, the Co-founder and Managing Director of the Iranian e-payment app Zarinpal posted a tweet on <\/span>1 December<\/span><\/a> explaining that he had been <\/span>handed<\/span><\/a> a one-year prison sentence for charges of \u2018corruption\u2019 and \u2018financial crimes\u2019. The charges were in relation to a disputed payment made via the platform. The founder of the Iranian messaging app, Gap messenger, was <\/span>summoned<\/span><\/a> by the Police and the Judiciary in relation to stolen and fraudulent cards being used to purchase mobile phone credit.\u00a0<\/span><\/p>\n

While the examples above took place during the Rouhnai administration, the same pattern presented itself after the arrival of Raisi into office and the appointment of Zarepour as ICT Minister. Within just over a month after the arrival of the new administration, in<\/span> September<\/span><\/a> 2021<\/span>, Mostafa Amiri and Ali Amiri, the founders of \u2018Zarinpal\u2019, were arrested by Iran\u2019s Cyber Police (FATA) upon arrival at Iran\u2019s Central Bank,\u00a0 where they were meeting regarding e-Namad online payment certificates. They were arrested on charges relating to \u201cdisruption of public opinion\u201d and released after a few hours on the same day.\u00a0<\/span><\/p>\n

In another example, in <\/span>November<\/span><\/a> 2021, the Iranian e-commerce and advertising platform Divar released a statement confirming that the company\u2019s CEO, Ashkan Armandehi, had received a prison sentence for three months and one day following a decision from Tehran\u2019s Court of Appeal on charges relating to \u201cenabling corruption and sex work\u201d, which Divar denied.\u00a0<\/span><\/p>\n

The news of Armandehi\u2019s sentence was met with widespread concern from Iran\u2019s tech and start-up community. He received support from across the country\u2019s tech sector, including from <\/span>Tehran\u2019s ICT Guild<\/span><\/a>, the <\/span>CEO of Shatel Mobile<\/span><\/a>,<\/span> the founder of Gap Messenger<\/span><\/a>, the e-payment platform <\/span>Zarinpal<\/span><\/a>, <\/span>Tap30,<\/span><\/a> and <\/span>Digikala<\/span><\/a> among others. Following this reaction, on 29 November a number of domestic news outlets reported that Iran\u2019s Head of Judiciary, Mohsen Eje\u2019i is stepping in to review the sentence. According to a <\/span>tweet<\/span><\/a> by the ICT Ministry\u2019s Spokesperson Jamal Hadiyan on the same day, the ICT Minister Eisa Zarepour had also asked for the sentence to be reviewed.<\/span><\/p>\n

Despite the recent intervention, 20 January 2022,\u00a0 the Iranian online e-commerce website 1DayOff, <\/span>confirmed<\/span><\/a> that their website had been \u201cblocked without notice following a request from Iran\u2019s ECommerce Union due to their lack of licence\u201d. The incident gained a significant amount of attention on social media, especially from concerned online business owners and startups, as well as by tech news outlets. According to a <\/span>report<\/span><\/a> by the tech magazine<\/span> Peivast <\/span><\/i>on 22 January, between late October to November 2021, the Union had requested the blocking of an additional 26 websites from the Police due to licencing issues; in some cases the Union had even asked the Police to prevent the website and the businesses\u2019 operations on social media platforms.\u00a0<\/span><\/p>\n

A few weeks prior, <\/span>a notice<\/span><\/a> from the President\u2019s Legal Affairs Deputy, Mohammad Dehghan, stated that in order to \u201creduce the obstacles for the country\u2019s startup community\u201d any disputes and complaints concerning startups from public authorities are to be addressed through a working group under control of the President\u2019s Legal Affairs Deputy as a first step before it can be escalated further. This is not the first time an attempt has been made to centralise a similar notice issued by the previous government which was largely ignored and of course, proved ineffective.\u00a0<\/span><\/p>\n

The divergence between the excessive sentences against the tech sector by the judiciary and FATA Police, and the interventions by the ICT Ministry and the government signals a still unclear strategy of how to pressure the private tech sector into submission - influencing and controlling users\u2019 behaviours, while attempting to balance their growth in order to maintain their position in Iran\u2019s internet ecosystem.\u00a0<\/span><\/p>\n

These domestic platforms have amassed thousands of users, if not more, carrying with them vast amounts of data, an effort that has been much less successful in government sanctioned services such as domestic messaging apps. The government control of these platforms over their management has an immense impact on user behaviour online and how their data is used.\u00a0<\/span><\/p>\n

Visible Resistance\u00a0<\/b><\/p>\n

There are two concerns occupying the minds of any internet user in Iran: reduced internet speeds and constant disruptions, and the so-called \u201cUser Protection Bill\u201d aimed at further solidifying previous policy efforts to restrict Iran\u2019s internet. The private tech sector in Iran has been visibly vocal about their <\/span>opposition<\/span><\/a> to these efforts, both of which are aimed at enhancing the country\u2019s internet control measures through the use of domestic services by reducing international internet speeds, and implementing measures to control Iranians in international platforms.\u00a0<\/span><\/p>\n

The willful resistance by Iran\u2019s increasingly challenged and shrinking private tech sector are one of the few remaining hopes and avenues to confront the challenges of the Iranian government\u2019s crackdown on the internet. The control of this section of Iran\u2019s internet is vital for the success of the NIN, as such, this group plays a crucial role in shaping the future of digital rights in Iran. The role and importance of this sector should be recognised in demanding better protections for both Iranian citizens and support for growth and innovation in this sector. The international community should also recognise the challenges faced by this sector, and approach potential avenues for supporting them so that they can strengthen user privacy and maintain their independence to the extent possible.\u00a0<\/span><\/p>\n


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The growth of Iran\u2019s tech startup community, once observed with awe due to its exponential growth which began around a decade ago, has been experiencing a slow-down. A contributing factor has been the increasingly apparent pressures exerted by Iranian authorities in order to bring the country\u2019s private tech sector further under government control, with newsContinue reading \"Disruption of Iran’s Private Tech Sector\"<\/span><\/a><\/p>\n","protected":false},"author":5,"featured_media":3506,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[68,75,58,95],"class_list":["post-3505","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investigations","tag-digital-rights-in-iran","tag-localisation","tag-national-information-network","tag-tech-sector","entry"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t