May 18 (Reuters) – Google’s Russian subsidiary plans to file for bankruptcy after authorities seized its bank account, making it impossible to pay staff and suppliers, but free services including search and YouTube will continue to operate , a Google spokesperson said Wednesday.
The Alphabet Inc (GOOGL.O) unit has been under pressure in Russia for months for not removing content Moscow deems illegal and for restricting access to some Russian media on YouTube, but the Kremlin has gone so far as to ‘now refrained from blocking access to the business. services.
“The seizure by Russian authorities of Google Russia’s bank account has rendered the operation of our office in Russia untenable, including the employment and payment of Russian-based employees, the payment of suppliers and vendors, and compliance with ‘other financial obligations,’ a Google spokesperson said.
“Google Russia has issued a notice of its intention to file for bankruptcy.”
A TV station owned by a sanctioned Russian businessman said in April bailiffs seized 1 billion rubles ($15 million) from Google over its failure to restore access to his YouTube account, but it is the first time the US tech giant has said its entire bank account has been seized. Read more
Google did not immediately confirm whether it was the seizure of those funds that led to its intention to file for bankruptcy, or whether other seizures had occurred.
The database of the Federal Service of Judicial Officers of Russia has identified two seizures since mid-March, without specifying the amounts, as well as other fines and enforcement costs.
The service confirmed that it had seized Google’s assets and property.
Google had moved many of its employees out of Russia since Moscow sent tens of thousands of troops to Ukraine on February 24. But some stayed.
A note posted on Russia’s official Fedresurs registry on Wednesday said the Google subsidiary intended to file for bankruptcy and, since March 22, had anticipated an “inability to meet monetary obligations,” including severance pay, remuneration of current and former staff and timely mandatory payments.
FREE SERVICES TO STAY
Google, which has suspended ad sales and most other business operations in Russia, said its free services, including Gmail, Maps, Android and Play, would remain available to Russian users.
Russia said on Tuesday it was not considering blocking Google’s YouTube, despite repeated threats and fines, acknowledging that such a move would likely hurt Russian users and should therefore be avoided. Read more
Rostelecom (RTKM.MM) chief executive Mikhail Oseevskiy said on Wednesday that Google was operating normally in the country, including all of its servers, TASS news agency reported.
In December, Russia imposed a 7.2 billion ruble charge on Google for what Moscow said was a repeated failure to remove content that Russia deems illegal, the first revenue-based penalty for such business in Russia.
This fine increased by 506 million rubles due to enforcement costs, according to data from bailiffs.
The turnover of the Russian subsidiary of Google in 2021 was 134.3 billion rubles, according to the Spark database of Russian companies of the Interfax news agency.
Alphabet said last month that Russia accounted for 1% of its revenue last year, or about $2.6 billion.
($1 = 63.9570 rubles)
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Reuters reporting; Editing by Elaine Hardcastle, Guy Faulconbridge, David Clarke and Barbara Lewis
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