Amazon-owned streaming service Twitch finds itself fighting against potentially the largest fine in corporate history in an unprecedented legal showdown highlighting the collision between global tech platforms and international sanctions.
The dispute centers on former professional League of Legends player Kirill “Likkrit” Konstantinovich Malofeyev, whose account was suspended in 2022 following U.S. sanctions against Russia.
From $2,000 to “All the Money in the World”: Malofeyev’s Twitch Fine Spirals
Malofeyev, the son of Russian oligarch Konstantin Malofeyev, got caught in the middle of international sanctions imposed following Russia’s incursion into Ukraine. The sanctions were aimed at his father’s “global sanctions evasion and malign influence network” to which Kirill was purportedly linked.
To abide by U.S. laws banning payments to Russian creators and suspending accounts belonging to sanctioned individuals, Twitch revoked Malofeyev’s streaming access.
The Russian player fought back by seeking legal recourse in his native land. Although his initial lawsuit failed, a second try succeeded through recently enacted Russian law aimed directly at thwarting Western sanctions.
The Russian court decided in favor of Malofeyev, directing Twitch to reinstate his account or pay a daily fine of 100,000 rubles (around $1,100), the fine doubling each week with no maximum limit.
This penalty mechanism has led the penalty to be at what Twitch’s lawyers characterize as an amount now in excess of “the total amount of money in the world” – a far cry from the less than $2,000 in revenue Malofeyev’s account had accrued while live on the platform.
Twitch, Amazon, and the Russian Judgment
In 2023, Malofeyev sought to enforce the Russian judgment against Amazon’s Turkish subsidiary via a Turkish Enforcement Action.
Twitch argues this action is invalid because Malofeyev’s contractual arrangements were made directly with Twitch, not the parent company Amazon, even though they are corporate siblings.
Twitch and Amazon have launched counter proceedings in the U.S. District Court for the Northern District of California as a response. They are requesting protection from the Russian judgment and to force arbitration under Twitch’s terms of service.
The companies are contending that the ruling of the Russian court is an unfair and grossly disproportionate sanction that cannot be honored in foreign jurisdictions.
This case illustrates the nuanced challenges confronting multinational technology companies that cross borders in times of geopolitical stress. Global platforms are caught in a delicate balancing act between adhering to international sanctions and fulfilling their legal requirements across different countries with competing legal frameworks.
The Twitch-Malofeyev conflict highlights how designated individuals can use empathetic legal frameworks to fight the application of global sanctions.
The establishment of special laws by Russia to circumvent Western sanctions serves as a juridical channel for the nationals they target.
As this courtroom fight continues to develop, its resolution will most probably establish significant precedents regarding the way that international tech companies approach sanctions compliance and cross-border legal conflicts. The case raises basic questions about jurisdiction, the enforceability of foreign judgments, and the function of arbitration agreements in global commerce.
