Google Russia Files Bankruptcy Due To Multiple Fines And Seized Bank Accounts

Google Russia files for bankruptcy over multiple fines. (photo: doc. pixabay)

JAKARTA - Google Russia subsidiary of Alphabet Google will file for bankruptcy. According to a Reuters report, they said they could no longer maintain this branch. Google's Russia branch reports that it generated 134.3 billion rubles (IDR 30.2 trillion) in Russia in 2021 and employs more than 100 workers.

"The seizure of Google Russia bank accounts by Russian authorities has rendered our office in Russia unable to function, including hiring and paying employees based in Russia, paying suppliers and vendors, and meeting other financial obligations," a Google spokesperson said in a statement to The Verge. “Google Russia has published a notice of its intention to file for bankruptcy.”

In March, Google suspended ad sales in Russia shortly after Russia invaded Ukraine. Google-owned YouTube also did the same to ban ads on channels owned by Russian government-backed media and then blocked these channels completely.

Last December, Russia fined Google 7.2 billion rubles (IDR 1.4 trillion) after it failed to remove content that Russia deems illegal from its platform. The fine sucks up about 8 percent of Google's revenue in Russia.

In addition, Reuters also reported that a Russian TV channel claimed authorities confiscated 1 billion rubles (IDR 217 billion) from Google last April, after not restoring access to the channel's YouTube account.

Russia's communications regulator also threatened to fine Google 8 million rubles (IDR 1.3 billion) after removing "illegal" videos from YouTube. It is not clear how much in total Russia has seized from Google.

A note posted to Russia's official financial registry, seen by Reuters, detailed Google's intention to file for bankruptcy.

“Since 22 March 2022, he foresees bankruptcy and his own inability to meet his monetary obligations, demands to pay severance payments and (or) remuneration of staff who worked or previously worked under an employment contract, and (or) the obligation to make mandatory payments within the specified,” said Google Russia.

So far, Google appears to be the first major tech company to file for bankruptcy in Russia due to the war in Ukraine. Other companies, such as Apple, Meta, and Microsoft, have had all operations suspended in the country but no Russian branch has declared bankruptcy yet.

Russia-backed food delivery startup Buyk filed for bankruptcy in March as a result of the economic sanctions imposed on the country. On Monday, May 16, McDonald's announced it would leave Russia and sell its fast-food restaurant after more than 30 years of operation in the country.

While Russia doesn't ban Google services in that country, it does ban Meta's Facebook and Instagram. Google says its free service will still be available in the country.

"People in Russia rely on our services to access quality information and we will continue to provide free services such as Search, YouTube, Gmail, Maps, Android and Play," a Google spokesperson added, as quoted by The Verge.