Status: 05/19/2022 2:18 p.m
Russian authorities blocked Google Russia’s bank account. The company then announced that it would file for bankruptcy. Is Google now turning its back on the country completely?
According to media reports, the Russian authorities have blocked Google Russia’s bank account. That makes the work of the Russian office impossible, said a spokesman for the US technology group. Google Russia could not pay its employees and suppliers and could not meet its other payment obligations.
Future of business questionable
This is the first time Google has confirmed that its accounts in Russia have been frozen. According to the spokesman, Google Russia has announced a bankruptcy filing against this background.
It was initially unclear whether this also means that Google, following the example of numerous other large US corporations such as the fast-food chain McDonald’s, would like to completely give up its business in Russia.
Google China as a role model?
However, a look at Google’s corporate history shows that the company’s withdrawal from Russia could well be an opportunity to try a new start in the country at some point. Google used to do something similar in China: in 2010, the technology giant withdrew completely from the Chinese market in the face of censorship and hacker attacks.
In 2018, Google returned – with a search engine app specially developed for the Chinese market that blocks content censored by the Chinese government.
The Kremlin has had its sights set on the group for a long time
According to the company, nothing will change for the time being for Russian users of Google services, which also include Gmail, Google Maps and YouTube – provided they are not blocked by the Russian government. At the beginning of the Ukraine war, Russia had blocked the Google news site. At the same time, the Russian government has repeatedly assured that it does not want to block YouTube, since such a step would primarily affect Russian users.
Nevertheless, the Russian Google branch has been under great pressure from the authorities since then. Finally, the company persistently refused to delete content that the Russian authorities consider illegal. Google also refused to comply with repeated requests to restore access to some Russian media such as the television channels RBK, NTW and TNT on YouTube.
Russian fine of millions is due
Investors are now speculating about the reasons for the bankruptcy application: the question is whether a Russian million-dollar fine could be related to it. The chronological sequence at least strongly suggests that: Today, a Russian fine of 7.2 billion rubles (at the time the equivalent of 86 million euros) against Google, which was imposed in December, is due. A court in Moscow imposed the fine after the search engine operator repeatedly refused to delete “banned content” from its platforms.
Because Russia has frozen Google Russia’s accounts, the US company’s Russian branch cannot pay the fine, the argument goes. The company, which is listed on the Nasdaq technology exchange, had previously unsuccessfully tried to appeal the decision. According to a report in the “Moscow Times”, it has been clear to Google’s Russian office since March 22 that it will soon no longer be able to meet its payment obligations.
Withdrawal would be manageable for Google
Google has not yet officially commented on this. Should the group actually file for bankruptcy for its Russian branch, it would be the first major US technology company to be forced to take such a drastic step. Other large tech companies such as Apple, the Facebook parent company Meta and Microsoft have so far only stopped doing business in the country.
Even a complete withdrawal from the Russian market would not hit Google’s parent company Alphabet very hard. Google pointed out in April that only one percent of the group’s sales came from Russia last year, at around 2.6 billion dollars.
Topic overview
war in Ukraine