Google’s Russian subsidiary to file for bankruptcy after Kremlin blockade

Google’s subsidiary in Russia plans to declare bankruptcy and stop operating in the country after authorities seized its bank account. The Kremlin’s crackdown on the U.S. tech giant comes after months of pressure for not removing content Moscow considers illegal.

“Since last March 22, 2022, the company foresees its own bankruptcy and inability to meet its monetary obligations,” reads the message published Wednesday in the official Russian federal register Fedresurs.

The IT company has confirmed its fragile situation. “The seizure of Google Russia’s bank account by the Russian authorities has made the operation of our Russian office untenable, including hiring and paying employees, paying suppliers and vendors, and meeting other financial obligations,” a company spokesperson said.
Pressure on tech companies

Although the Kremlin has not yet opted to block access to Google, the seizure of its account is a major blow against the company. Moreover, this is not the first case of pressure against the technology company, accelerated since YouTube, under the same ownership, decided to block access to some Russian media affiliated to the State, such as the RT channel or the Sputnik agency, as well as to prohibit its monetization through advertising.

At the moment it is not known whether the cause of Google’s insolvency is the millions of dollars in fines imposed by Moscow for not complying with its restrictive digital censorship laws or because of the complaints filed at the request of Russian media. The company confirmed in May that it had blocked up to eight million ads related to the Russian military campaign in Ukraine. This sought to “avoid profiting from or exploiting” the invasion. Advertising by Russian companies was also banned abroad.

According to the Interfax agency, in 2021 Google Russia’s losses amounted to 26 billion rubles (about $409 million). Despite the closure of its office and operations on Russian soil, the company has explained that free services such as Gmail, Google Play or Youtube will continue to operate.

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