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Google just declared bankruptcy in Russia—but insists it will keep offering free services there

May 18, 2022, 2:21 PM UTC

Google’s Russian subsidiary is officially going bust, with the company blaming Russia’s seizure of its bank account there.

It’s now two and a half months since the U.S. tech giant suspended all advertising in Russia, in connection with the country’s invasion of Ukraine.

A few days after that move, Google suspended Google Play billing in Russia, meaning its users there could no longer buy apps or subscriptions, or make in-app purchases.

On Wednesday, the Russian corporate registry Fedresurs published a notice saying it hd been informed by Google’s Russian subsidiary that the entity “foresees its own bankruptcy and the impossibility of fulfilling monetary obligations.”

It said bailiffs this month opened a case against Google over the enforcement of a 7.2-billion-ruble ($112 million) fine that was levied on the company at the end of last year, over its failure to remove banned online content, and that was due for payment before March 19.

The registry also noted that Google’s Russian entity made a net loss of 26 billion rubles in 2021.

“We previously announced that we paused the vast majority of our commercial operations in Russia,” a company spokesperson said in an emailed statement.

“The Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations. Google Russia has published a notice of its intention to file for bankruptcy.”

However, Google also insisted it would keep offering free services in Russia, including Search, YouTube, Gmail, Maps, Android, and its Play app store. “People in Russia rely on our services to access quality information,” the spokesperson said.

Google has, like many Western tech firms, had a tough time in Russia due to the country’s ever-tightening control of online expression (and due to its antitrust enforcers, which in 2016 nailed Google over its monopoly-abusing practices on the Android platform, much as the EU would go on to do two years later.)

The biggest issue is Google’s aforementioned refusal to remove banned content—and the way the company’s executives were treated over this issue provided a sobering demonstration of the dangers of maintaining Russian offices.

Last year authorities were furious with the company because it wouldn’t remove the Russian opposition’s tactical voting app ahead of elections.

Google eventually pulled the app after Russian agents visited the home of a top executive there, as the Washington Post reported in March—Google moved the executive to a hotel, but the same agents showed up there too, to tell her time was running out.

However, although the Russian authorities continue to gripe about some of Google’s behavior—in particular YouTube’s restriction of access to state-linked propaganda accounts—Russia never banned Google and its services, as it did Meta’s Facebook and Instagram a couple months ago.

Indeed, state media reported Wednesday that Google was still working across Russia, and its servers are still operational there.

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