Google’s Russian Unit To File For Bankruptcy – Update

Google subsidiary in Russia has its local bank account seized by authorities, and responds by announcing intention to file for bankruptcy

The Russian subsidiary of Alphabet’s Google has announced its intention to file for bankruptcy, raising questions whether it will follow other Western firms and exit the country altogether.

According to Reuters, which cited a message posted on Russia’s official registry Fedresurs on Wednesday, Google’s Russian subsidiary was “submitting a notice of the intention to declare itself insolvent (bankrupt).”

“Since March 22, 2022, it foresees its own bankruptcy and inability to fulfil 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,” Reuters quoted the bankruptcy note as saying.

Google Russia

Google reportedly did not immediately respond to a request for comment.

And David Sneddon, who the document named as the subsidiary’s general director, could not immediately be reached.

Earlier this week Russia’s digital development minister insisted Moscow was not planning to block YouTube in the country as Russian users would suffer.

Its local servers would continue operating, despite a number of fines and penalties.

Last December for example, a Russian court fined Google nearly $100 million (£75m) over what it termed “systematic failure to remove banned content”, the largest penalty the country had imposed on a Western tech company.

And then Russia decided to illegally invade Ukraine on 24 February.

Russian authorities responded to the bankruptcy notification and have reportedly seized Google’s Russian bank account, making it impossible for its Russian office to function.

Google (according to its locations webpage) has an office in Moscow.

Russia it should be remembered had demanded that 13 foreign and mostly US technology companies be officially represented on Russian soil by the end of 2021 or face possible restrictions or outright bans.

Russia fines

Moscow has blocked or slowed access to most Western social media platforms, and has previously threatened Google’s YouTube for failing to delete content it considers illegal.

But the country has so far held off from barring YouTube access from within Russia, in part because it lacks a large-scale equivalent to the service.

YouTube has around 90 million users in Russia and plays a significant economic role in the country.

Last month a Russian media outlet (Tsargrad TV) claimed bailiffs in the country had seized 1 billion roubles ($12 million) from Google in fines.

Russian propaganda

Meanwhile YouTube has clamped down on a number of Russia’s propaganda outlets in the past year.

In September 2021, YouTube deleted the German-language channels of state-backed broadcaster RT (formerly Russia Today).

RT is a Russian state-controlled television network funded by the federal tax budget of the Russian government.

YouTube said the RT German channel repeatedly broke its policies and rules surrounding Coronavirus misinformation.

Then when Russia invaded Ukraine on 24 February, the world responded with a punishing swath of sanctions against Russia.

This included Google and Facebook blocking ad revenues for Russian state-owned media outlets.

YouTube also blocked channels connected to Russian state-backed media outlets RT and Sputnik.

Western firms are starting to withdraw from Russia altogether.  This week MacDonalds announced it was closing down its entire Russia operation, spanning over 700 restaurants.

UPDATE: Reuters has now reported that Google took the decision to file for bankruptcy after Russian authorities seized its local bank account.

“The Russian authorities seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations,” a Google spokesperson reportedly said.

“Google Russia has published a notice of its intention to file for bankruptcy.”