According to Reuters, Google’s Russian unit will file for bankruptcy, alleging that the corporation can no longer maintain the branch. In 2021, the Russian branch recorded earnings of 134.3 billion roubles ($2.086 billion USD) and employed over 100 people.
What’s New?
“The Russian au thorities’ confiscation of Google Russia’s bank account has made it unsustainable for our Russia office to function,” a Google representative told The Verge.
“This includes employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial commitments.” “A notice of Google Russia’s intention to file for bankruptcy has been published.”
Google stopped selling advertisements in Russia in March, just after Russia invaded Ukraine. YouTube, which is owned by Google, has also moved to ban adverts on Russian state-backed media outlets, and has since blocked them entirely.
Russia penalized Google 7.2 billion roubles ($98 million USD at the time of writing) in December for failing to remove unlawful information from its sites. The penalties amounted to nearly 8% of Google’s Russian revenue.
What’s More?
Furthermore, according to Reuters, a Russian TV broadcaster reported that officials seized 1 billion roubles ($15 million USD) from Google in April when it refused to restore access to the channel’s YouTube account. After removing “illegal” content from YouTube, Russia’s communication regulator threatened to impose Google an even smaller 8 million rouble fine (about $95,000 USD at the time of writing). It’s unknown how much Google has been confiscated in total by Russia.
Google’s free services will remain accessible.
Google’s decision to file for bankruptcy was detailed in a note sent to Russia’s official financial record, which Reuters obtained.
“It foresees its own bankruptcy and inability to meet its monetary obligations, demands to pay severance payments and (or) the remuneration of staff working or previously working under an employment contract, and (or) the obligation to make mandatory payments within the prescribed period,” according to the statement.
Digging In More Details
So far, it looks that Google is the first major tech corporation to declare bankruptcy in Russia as a result of the conflict in Ukraine. Apple, Meta, and Microsoft have all ceased business in the nation, although their Russian subsidiaries have not declared bankruptcy. Buyk, a Russian-backed food delivery firm, declared bankruptcy in March as a result of the country’s economic sanctions. After more than 30 years in Russia, McDonald’s announced on Monday that it will quit and sell its fast-food locations.
Although Russia did not go as far as to outright prohibit Google’s services, it did outright ban Meta’s Facebook and Instagram. According to Google, its free services will continue to be available throughout the country.
“People in Russia rely on our services to access high-quality information, and we’ll continue to provide free services like Search, YouTube, Gmail, Maps, Android, and Play,” said a Google spokeswoman.