Google Russia files for bankruptcy after penalty payment

Due to Russia’s war of aggression against Ukraine, the West was forced to impose extensive economic sanctions. These now seem to have a notable victim. Google Russia has now had to file for bankruptcy. But is Western sanctions policy really behind this?

Google subsidiary is insolvent

An exact reason for the insolvency of Google Russia is not yet known. However, it is probably fairly certain that Western sanctions are not the cause of the insolvency. Instead, a fine imposed last December seems to have brought to light the problem behind the miserable economic condition of the Google subsidiary. The offshoot of the search engine giant was ordered to pay the equivalent of almost 86 million euros. According to the Moscow court ruling, the company should have paid this sum in mid-March. But instead of paying, Google Russia made it clear that it simply did not have the money. As a result, insolvency ensued.

Astonishingly high fine

It is not a Russian phenomenon that Google, as a Western company, is sentenced to pay a fine. Within the European Union, too, there have already been several court disputes. Here, it was primarily data protection or competition law that justified the penalty payment. However, it cannot be dismissed out of hand that the verdict of the Moscow court in December of last year included an astonishingly high sum of money. The amount itself can probably be attributed to the fact that it was not the first court hearing around a certain accusation. Between Russian politics and Google Russia there were discussions about the content of the search engine for a long time. For the Russian leadership, too much questionable content was accessible. Consequently, they committed Google to censorship, which the search engine giant, however, denied. Thus, the search engine refused to delete certain content over a longer period of time.

In view of the Russian government’s censorship mentality, which was already prevalent before the Ukraine war, this request is not surprising. But how come the fine is so much higher than previous court rulings by Western countries? Russia used the search engine giant’s annual revenue to calculate the fine. While the amount differs significantly from other judgments also issued in Russia, the reason was not new. In the meantime, Google has already had to dig deep into its pockets several times to make up for its uncooperative behavior from the Russian perspective. After all, Google commendably did not buckle at any point. However, the ruling issued in December seems to have been the final stab in the back for the Google subsidiary.

End of the neutral Internet in Russia?

While it won’t hit Google too hard financially to put its Russian subsidiary on ice (for now), the bankruptcy is a hard blow for the Russian people. After all, Google Russia is probably the country’s last neutral news source. On top of that, it is important to remember that the insolvency of Google Russia also affects YouTube in Russia. So far, users in Russia can still use both the search engine and the video portal. How this will be in the future, however, is still up in the air. Media reports indicate that the Russian government is at least not planning to block the services. This is extremely surprising in view of its other strategy towards Western sources.

After all, the first days of the Urkraine War were also immediately accompanied by a ban on Facebook. Why Google was left out of this is still questionable today. After all, the search engine giant was not really cooperative either. Since the beginning of the war, for example, there has been a ban on advertising for Russian state media that can be accessed on Google. It is possible that the Russian leadership would like to offer its population at least some measure of normality. On the Internet, Google’s accessibility is now one of them. It is also conceivable that Google Russia will be taken over by Russia without further ado due to the insolvency. More details are not yet known, however. We are curious to see how the insolvency will affect the future of Google Russia.