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What just happened? The Russian subsidiary of Google will file for bankruptcy after authorities seized its bank account, leaving the company unable to meet financial obligations, including paying staff, suppliers, and vendors. However, its free services, such as search and YouTube, will keep operating in the country.
Reuters reports that the Alphabet unit has been under pressure in Russia for a while, but the invasion of Ukraine has seen authorities escalate the situation. Since then, Google has suspended all advertising in the country, banned state-run media channels from YouTube, and refused to remove content relating to the war that Russia deemed illegal, which led to Google News being banned.
"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," a Google spokesperson said. "Google Russia has published a notice of its intention to file for bankruptcy."
Russia fined Google 7.2 billion roubles, around $98 million, in December for failing to remove content authorities deemed illegal. More recently, a Russian TV channel owned by a sanctioned billionaire claimed authorities seized 1 billion roubles (about $15 million) from Google in April for failing to restore access to its YouTube account.
A message on Russia's official registry Fedresurs states that the Google subsidiary intended to declare bankruptcy and since March 22 has foreseen its "inability to fulfill its monetary obligations."
According to The Wall Street Journal, most of Google's Russian employees have opted to leave the country and continue working for Google outside of Russia, with many ending up in Dubai, though some did decide to stay in Russia and leave the company.
Unlike Facebook and Instagram, Russia isn't banning Google services in the country. "People in Russia rely on our services to access quality information and we'll continue to keep free services such as Search, YouTube, Gmail, Maps, Android and Play available," a Google spokesperson said.
Google's Russian subsidiary employed over 100 workers and made 134.3 billion roubles in Russia in 2021. That's around $2.6 billion, or 1% of Alphabet's global revenue.