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Google’s Russian subsidiary will file for bankruptcy, citing asset seizure

Google's Moscow-based subsidiary submitted a notice of intention to declare itself bankrupt. Russia's seizure of the tech giant's assets has made it impossible to run its business in the country.KIRILL KUDRYAVTSEV/AFP via Getty Images

Google’s Moscow-based subsidiary plans to file for bankruptcy, a company spokesperson said Wednesday, because Russia’s seizure of its assets has made it impossible to run its business in the country. It has also moved most of its employees out of the country, the company confirmed.

The tech giant submitted a notice of intention to declare itself bankrupt, according to Reuters, which cited a filing in Russia’s federal register. Services such as Gmail, Search, and YouTube — which are all popular with Russians — will keep working in the country.

‘’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 spokesperson Julie Tarallo McAlister said.

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Google’s bankruptcy filing is the latest development in a tumultuous back-and-forth between the Silicon Valley tech giant and the Russian government.

The company stopped selling advertising and cloud computing services in Russia in March, part of a wave of US companies who pulled back on business activities there in the weeks following Russia’s invasion of Ukraine. It kept running Gmail, YouTube, Maps, and Search, and will continue doing so because ‘’people in Russia rely on our services to access quality information,’’ the spokesperson said.

Google has also moved its Russian employees who have chosen to stay with the company out of Russia, the company confirmed Wednesday. The Wall Street Journal first reported the employee moves.

Russia has long used censorship and propaganda to shape public opinion, but US-based social media networks like Facebook, Twitter, and YouTube had operated with relative freedom for years, and Russians have used them to share political opinions freely. In 2021, Russia passed a law requiring tech companies to keep employees in the country, a move widely seen as a way to increase their leverage over them.

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Before the invasion of Ukraine, Russia had already been flexing this power, sending agents to the home of a Google executive in Russia as part of the government’s efforts to get an app run by opposition leader Alexei Navalny off Google’s app store, The Washington Post reported in March. Google took down the app.

In December, Russia fined Google nearly $100 million for not removing content the government said was illegal. The company has received various smaller fines in the past, but the new fine, calculated based on Google’s revenue, was a significant escalation.

Tensions reached a new phase after Russia’s attack on Ukraine.

Facing intense pressure from Ukraine and Western governments, Google, Twitter, and Facebook limited the Kremlin’s global propaganda networks on their platforms in the weeks after the Feb. 24 invasion. YouTube removed hundreds of channels and videos, saying they broke its rules against ‘’coordinated deceptive practices.’’

Soon after, in early March, Google announced it would halt all search, YouTube, and display ads in Russia after authorities asked it to block ads related to Ukraine. It also removed Russian state-controlled media outlets RT and Sputnik from its search results in the European Union in response to a government regulation there, according to the company’s announcement.

Moscow’s telecommunications regulator has shot back, posting statements asking Google to reinstate Russian channels and accusing it of taking Ukraine’s side in the information war. But while Russia banned Twitter and Facebook, it has so far allowed YouTube to keep operating, and on Tuesday, a state official said the government had no plans to ban it, according to the Tass news agency.

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YouTube is the most popular social network in Russia and is used by millions for everyday entertainment, whereas Twitter, Facebook, and Instagram had smaller user bases and were more popular with younger Russians. The Russian-based social networks VK and Odnoklassniki have been more amenable to government censorship, according to Russians who use the platforms.

Google has been hit with various fines in Russia as well. In late April, a Moscow court ordered the seizure of 500 million rubles in Google’s possession, worth about $7 million at the time, in a lawsuit stemming from restrictions the US tech firm had placed on the YouTube channel of a prominent television firm, according to Reuters.