Google’s Russian subsidiary is headed for bankruptcy
Russia’s invasion of Ukraine has precipitated tit-for-tat sanctions and other enforcement actions between western powers and Moscow. We’ve seen stories detailing McDonald’s excruciating exit from the Russian market. Now, Google’s operations in the country are set to file for bankruptcy.
In a statement issued to press outlets (viaThe Wall Street Journal), the company said its subsidiary wasn’t able to make payroll and fill invoices after federal agents seized its bank account. Additionally, a court-issued fine of 7.22 billion rubles (approx. US$111 million) against the company for hosting banned content about Russian military operations in Ukraine on YouTube was coming due on Thursday (viaInterfax).
The Putin administration has been at odds with Google and other Big Tech stalwarts for not accepting its demands to take down what it claims to be false information about its military operations. The company was also slapped with a smaller fine of 11 million rubles in December for a similar offense (viaThe Moscow Times).
Google’s statement goes on to say that it will continue to keep Android, Gmail, Maps, Play, Search, and YouTube available and free to use in the country. But the tech giant will face ongoing challenges to keep those services relevant to Russian users.Many paid services remain unavailableas Russia remains cut off from the SWIFT global banking network — this has effectively made it impossible to maintainpaid apps on the Play Store in Russia. And on Monday, the Kremlin-backed alternative Android app marketplaceNashStorecame online (viaInterfax) with more than a thousand domestically-hosted apps.
With ongoing tensions surrounding the war, the company may also face extra scrutiny in the Russian legal system as it attempts to settle with creditors through bankruptcy proceedings. Expect more sanctions of different sorts and more lives lost as battles rage on.
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