Google’s Russian Subsidiary Files for Bankruptcy

Google's Russian subsidiary goes de facto bankrupt after authorities seized its bank account, making it impossible to pay employees and suppliers. But free services, including search and YouTube, will continue to work, a Google spokesman said Wednesday.

A Google spokesperson said Wednesday that Google's Russian subsidiary plans to file for bankruptcy after authorities seized its bank account, preventing it from paying employees and suppliers, but free services including search and YouTube will continue to operate.

Alphabet's division has been under pressure in Russia for months for not removing content that Moscow considers illegal and for restricting access to some Russian media on YouTube, but the Kremlin has yet to block access to the company's services.

The seizure of the Google Russia bank account by the Russian authorities has made it impossible for our Russian office to operate, including hiring and paying Russian employees, paying suppliers and vendors, and meeting other financial obligations,” a Google spokesperson said. "Google Russia has published a notice of its intention to file for bankruptcy."

A TV station owned by a sanctioned Russian businessman said in April that bailiffs seized 1 billion rubles ($15 million) from Google for failing to regain access to his YouTube account, but this is the first time. when the American tech giant announced that its bank account as a whole was under arrest.

Google did not immediately confirm whether the seizure of these funds was the reason for its intention to file for bankruptcy or whether other arrests took place. Since mid-March, the database of the Federal Bailiffs Service of Russia has indicated two seizures without specifying amounts, as well as other fines and performance fees.

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The service confirmed that it had seized Google's assets and property. Google has confirmed it has withdrawn many of its employees from Russia after Moscow sent tens of thousands of troops to Ukraine on February 24. But some chose to stay.

A report posted on Wednesday in the official register of the Federal Resource of Russia said that the Google subsidiary intended to file for bankruptcy and foresaw "failure to meet its monetary obligations" since March 22, including severance pay, compensation to current and former employees and timely mandatory payments.

Free services, including Gmail, Maps, Android, and Play, will remain available to Russian users. Russia said on Tuesday it had no plans to block Google's YouTube despite repeated threats and fines, acknowledging that such a move would likely cause Russian users to suffer and should therefore be avoided.

Rostelecom CEO Mikhail Oseevsky said Wednesday that Google is operating normally in the country, including all of its servers, TASS reports.

In December, Russia filed a 7.2 billion ruble charge against Google for what Moscow called its repeated refusal to remove content Russia deemed illegal, the first revenue-based fine in Russia.

This fine increased by 506 million rubles due to the enforcement fee, according to the data of bailiffs.

See also: McDonald’s Sells Its Business in Russia over Ukraine War

The revenue of the Russian subsidiary of Google in 2021 amounted to 134.3 billion rubles, according to the Spark database of Russian companies of the Interfax news agency.

Alphabet said last month that Russia accounted for 1% of its revenue last year, or about $2.6 billion.

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