Google's Russian subsidiary is planning to file for bankruptcy after authorities seized his bank account, making it impossible to pay employees and suppliers. But free services, including search and YouTube, continue to work. People in Russia rely on its services to access reliable information.
The Russian branch reported that it generated 134.3 billion rubles (about 2.086 billion US dollars) in Russia in 2021 and employed more than 100 workers.
A Google spokesperson said in a statement: “The Russian authorities’ seizure of the Russian company Google’s bank account has made it impossible to continue operating our office in Russia, including hiring and paying employees residing in Russia, paying suppliers and suppliers, and fulfilling other financial obligations.”
Google Russia posted a notice of its intent to file for bankruptcy and that it could no longer keep the subsidiary.
The company has been under pressure in Russia for months for failing to remove content Moscow considers illegal and to restrict access to some Russian media via YouTube. But the Kremlin has not yet blocked access to the company's services.
A TV channel owned by a sanctioned Russian businessman said in April: The authorities confiscated 1 billion rubles ($15 million) from Google because it had not restored access to the channel's account via YouTube.
But this is the first time that the US tech giant has announced the confiscation of its entire bank account.
The company did not confirm whether the confiscation of those funds led to its intention to file for bankruptcy, or whether other seizures had taken place.
The Russian Federal Debt Collection Service's database listed two seizures since mid-March, without specifying the amounts, as well as other fines and fees.
The service confirmed that it had seized the company's assets and property. While Google confirmed that it has moved many of its employees from Russia since Moscow sent tens of thousands of troops to Ukraine on February 24.
Google Russia bank account confiscated
Russia's official financial record stated that the Google subsidiary had intended to file for bankruptcy. Since March 22, it has anticipated that it will not be able to meet its financial obligations, including termination indemnities, bonuses for current and former employees, and mandatory timely payments.
Google has temporarily suspended ad sales and most other business operations in Russia. But it said its free services, including mail and maps, remain available to Russian users.
Russia said it had no plans to block YouTube, despite repeated threats and fines. It acknowledged that such a move could cause suffering to Russian users and should therefore be avoided.
"Google is operating as usual in the country, including all of its servers," Rostelecom CEO Mikhail Osevsky said.
In December, Russia imposed a fine against Google of 7.2 billion rubles (US$98 million). The fine came due to the company's repeated failure to remove content that Russia considers illegal.
The fine amounted to about 8% of the company's revenue in Russia. It represented the first penalty on the basis of revenue from this type of case in Russia.
The revenue of the Russian company Google in 2021 amounted to 134.3 billion rubles. Alphabet said last month that Russia accounted for 1% of its revenue last year, or about $2.6 billion.
Google appears to be the first big tech company to file for bankruptcy in Russia as a result of the war on Ukraine. Other companies, such as Microsoft, Meta and Apple, suspended all operations in the country. But its Russian subsidiaries have not declared bankruptcy.