Saturday, August 13, 2022

Google subsidiary in Russia goes bankrupt

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2 min read

The dispute between the Russian authorities and Google over moderating the content escalated with the beginning of the invasion of Ukraine and the introduction of sanctions. Russia has now ruled in favor of Google by confiscating funds in their bank account.

Disputes between Google and Russia began months before the country came under sanctions, and escalated to the point that one move by the ruling party ultimately ruled Google’s Russian subsidiary. It all started back in the fall of 2021, when Google was punished for violating the law on personal data, ie for not complying with the law on the storage of Russian data exclusively on servers located in that country.

Russia imposed a second, higher, sentence on Google in December. At the time, Google was sentenced to pay nearly $ 100 million for failing to remove content it deemed undesirable by Russian authorities, as regulators demanded.

The saga continued with an additional seizure of about $ 15 million from Google in April. This time, the reason for punishing the internet company was to delete certain YouTube channels from the video platform, primarily the channels of people and media that supported the ruling regime.

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With the invasion of Ukraine, Google also stopped monetizing YouTube ads to Russian users, to which Roskomnadzor responded by (temporarily) blocking access to Google and YouTube. The final unfolding of this whole story happened this week, when the ruling party “sat down” on the bank account of Google’s Russian subsidiary and confiscated everything that was there.

 

This has led to a situation where Google can no longer pay salaries to its hundreds of employees or settle liabilities to suppliers, so they were forced to declare bankruptcy. Google’s office in Russia, which generated about $ 2 billion a year in revenue, will be shut down and a number of employees will be relocated to other countries. Nevertheless, YouTube, Google Maps, search engine, Gmail and other free Internet services will remain available in Russia.

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