Alphabet’s Google Russia subsidiary will be shutting down. The reason has to do with the fact that the Russian government confiscated the business’ bank accounts.
The move comes after Russia’s invasion of Ukraine is nearing the three month mark. Western sanctions imposed to punish Russia for the invasion have all but mooted Google’s activities in the country, with much of its internet connections cut off from the outside world. The Russian government is also in dire need of any cash that it can get its hands on ad the west has frozen the country’s hard currency accounts abroad.
“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,” a Google spokesperson said.
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According to the official Russian news agency Google was ordered by a court to pay a 7.2 billion fine ($120 million at the current official exchange rate which, however, is artificially propped up by the Russian government). And with the country suffering from massive inflation right now those Rubles won’t go very far t any exchange rate.
Google Russia has been attacked in Russian courts for suspending many Russian accounts and for blocking many Russian YouTube channels. Some of these actions by Google came as a result of economic sanctions imposed by the west against Russia that required the company to do so. In some cases, however, Google chose to shutdown certain accounts that were proliferating fake news about the Russian invasion of Ukraine.
But with the company’s closure it does not matter what value Russia sets for the Ruble, nor how much it fines Google Russia in either Rubles or Dollars or even Euros There is little if any chance that the fine will ever be paid.