Google decided to file for bankruptcy in Russia. According to a report from Reuters, Kremlin authorities seized Google’s bank account, leaving it unable to pay employees and suppliers. Although the technology began the exodus two months ago, the seizure of assets by the Government of Vladimir Putin accelerate your departure from the country.
“The seizure by the Russian authorities of Google Russia’s bank account has made the operation of our office in Russia unsustainable,” a company spokesman said. “That includes paying employees based in Russia, suppliers and vendors, and meeting other financial obligations,” he mentioned.
The decision to file for bankruptcy was not made today. The Federal Resources office indicated that the company considered it since March 22. Although Google will not close the entire operation in Russia, the cause of its departure is a warning of what could happen to the rest of technology.
Russia has already taken the first step towards the nationalization of assets
In response to economic sanctions that caused an exodus of Western companies, Russia warned that it could take control of its assets. An bill announced in February allows Russian courts to appoint external administrators in companies that suspend operations.
The measure seeks nationalize companies with foreign participation (more than 25%) that come from hostile countries. If the company refuses to resume or sell its operation, its shares will be auctioned off.
Although some experts anticipate that Russia would not dare to nationalize Western companiesmany they don’t want to take the risk. Renault has already sold its stake in automaker Avtocaz, while L’Oreal has done the same under pressure from consumers. Others, like Unilever or Nestlé, decided to stay despite threats of an international boycott.
the tech companies they are cooked besides. Although economic sanctions and supply chain disruption are enough to leave the country, there is another compelling reason: censorship. Russia’s attempts to control the narrative have led to multiple frictions with Silicon Valley companies.
Google and other technology companies have always been in the sights of the Kremlin
In January 2021, the Government declared war on Starlink, SpaceX’s satellite internet, and threatened to fine users who contracted its services. Later that year, Russia fined Google 87 million euros for refusing to remove content deemed illegal. The authorities threatened to send to prison the employees of these companies who refused to cooperate with the investigations.
Tensions between the technology companies and the government of Vladimir Putin reached a critical point with the war in Ukraine. The decision to remove YouTube channels linked to the Kremlin, or allowing hate speech to invading soldiers angered Russia. Retaliation was not long in coming and Roskomnadzor banned Twitter, Facebook and Instagram.
In March, the Ministry of Digital Transformation met with local companies to define an action plan to counter the web storage crisis. The idea of nationalizing assets again became present when the Government suggested seizing the servers and installations of the companies that left the country.
Google and other companies have already evacuated much of their staff. According to Wall Street Journal, most of the technology company’s employees left the country and moved to the Dubai offices. The rest stayed and resigned from the company. Despite the announcement of the bankruptcy of its subsidiary, Google will continue to offer free services such as the Search Engine, Gmail, Maps and YouTube in Russia.