Google Russia Declared Bankrupt After Bank Account Seizure

Russian internet © Pavel Ignatov Shutterstock 2012

Russian subsidiary of Google officially declared bankrupt after authorities in Moscow seized bank account in dispute with Western tech

Russia’s battle against Western technology giants continues, with the news that Google’s Russian subsidiary has been declared bankrupt.

Reuters cited the RIA news agency as reporting the development on Wednesday, with a Moscow court making the bankruptcy ruling after more than a year of proceedings.

In May 2022 Russian bailiffs had seized 7.7bn roubles from Google that had been ordered as part of a fine calculated on the basis of the company’s annual turnover – the first time such a fine had been levied in Russia.

Bank account seized

Soon after that Google declared its Russian subsidiary bankrupt after Russian authorities seized its main Russian bank account and transferred the funds out of the account, leaving it with no funds to pay contractors or staff.

Google had already moved most of its employees out of the country and closed down its local office.

Google has been fined millions of dollars by Russia, over its repeated refusals to remove content that Russia deems illegal, such as “fake news” about Russia’s illegal invasion of Ukraine.

Google also stopped selling online advertising in Russia in March 2022, but its free services such as Google search, YouTube, Gmail, Maps, Android and Play are still available in the country.

YouTube therefore remains of one of the few western technology platforms able to deliver factual news to Russian citizens – free from Russian propaganda – much to Moscow’s chagrin.

YouTube has also blocked channels connected to Russian state-backed media outlets RT and Sputnik, following the February 2022 invasion.

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

Sputnik International meanwhile is a Russian state-owned news agency, broadcaster and website platform.

Both media outlets have denied Western allegations they are Russian propaganda outlets.

Bankruptcy declaration

This week Reuters has reported that Google’s Russian subsidiary has been recognised as bankrupt by a Moscow court.

Google reportedly declined to comment on the development.

Russia continues its attempt to clampdown on Western tech, and earlier this month a Russian senator for the ruling United Russia party said that communications regulator Roskomnadzor planned to block Virtual Private Networks (VPNs) from 1 March 2024.

The Russian government had passed a regulation in 2017 that banned the use of VPNs, but that did not stop Russian citizens from downloading and using them to bypass Russian censorship attempts.

Indeed, demand for VPN services in Russia soared after Moscow restricted access to Western social media following President Vladimir Putin’s illegal invasion of Ukraine in February 2022.

Roskomnadzor has opened administrative cases against Google and six other foreign technology companies in 2022 for what it called violations of data protection legislation.

It comes as punishing global tech sanctions have been levelled against Russia, and many tech firms have already withdrawn completely from the Russian market.

Big name social networking giants such as Twitter or Facebook are already blocked in the country.