17 Jun 2022 09:42

Russian subsidiary of Google files for bankruptcy

MOSCOW. June 17 (Interfax) - Google's subsidiary in Russia, Google LLC, has filed for bankruptcy.

The motion for bankruptcy was lodged with Moscow's Arbitration Court on June 16, according to the database of arbitration cases.

A Google spokesperson confirmed to Interfax that the company's Russian entity has filed for bankruptcy, adding that the freeze of Google Russia's bank account has made it impossible for the Russian office to continue functioning and to fulfill its financial obligations.

Google LLC posted a notice on Russia's official registry Fedresurs on May 18 that it intends to apply to the arbitration court to declare its own bankruptcy. The Russian company said then that it "has been anticipating its own bankruptcy and the impossibility of executing monetary obligations" beginning March 22, 2022.

The Google press service said at the time that the freeze on the Google Russia bank account had made the operation of the Russian office impossible, including paying for jobs and making the payroll of the Russian staff, settlements with suppliers and contractors, and fulfillment of other financial liabilities.

However, free Google services, such as Google Search, YouTube, Gmail, Maps, and Google Play, will remain accessible in Russia, it said.

Google's Russian legal entity was registered in 2005. At the end of 2021, it posted revenue of 134.3 billion rubles and a net loss of 26 billion rubles, the company's first loss since 2009.

Russian regulators are acting through administrative and court response measures to get Google to remove banned content from its services, to localize the database of Russian users in Russia, and to lift restrictions on Russian media outlets' YouTube channels.

In particular, the Tagansky Court of Moscow in late December 2021 ordered Google to pay a revenue-based fine of over 7.2 billion rubles, equivalent to 5% of the company's revenue in Russia, for its repeated refusal to delete content prohibited in Russia. The deadline for paying the fine was March 19, 2022. In May of this year, bailiffs opened a case to enforce the collection of this fine.

In addition, following a motion lodged by a group of Russian media outlets seeking the restoration of access to their YouTube channels, the court ruled to freeze the company's funds and property worth 4.5 billion rubles.

On June 16, 2022, Google was fined 15 million rubles for its repeat refusal to localize the database of Russian users on Russian territory.