Google Faces Bankruptcy And Can't Pay Fines
One of Google's branches was reported to have gone bankrupt, the cause was none other than a fine levied by the country to Google. The fine came so many times that it reached the limit of Google's ability to pay and finally officially declared bankruptcy. Then which branch of the country is bankrupt?
The branch is Google's branch in Russia, of course the one who gave the multiple fines was Russia and this made the Russian branch of Google officially declared bankrupt and had to leave the country. Even the bank account of the branch has been confiscated by the Russian government, besides that Google is also rumored to be unable to pay salaries, compensation and run company operations in the country.
"Since March 22, 2022, Google has been predicted to go bankrupt because it is unable to meet its financial obligations. Demands to pay severance pay and (or) remuneration of staff working or previously working under an employment contract, and (or) obligations to make mandatory payments within the specified time period," according to a note to the Russian Financial Registry quoted by Reuters.
Google reportedly earned 134.3 billion rubles (US$2.086 billion) in Russia in 2021 and employs more than 100 people. The revenue represents 8 percent of Google's revenue used to pay fines to the Russian government. In December 2021, Russia fined Google 7.2 billion rubles (US$98 million USD) or around Rp1.4 trillion because Google was deemed to have failed to remove content that Russia considered illegal on its platform.
Not only that, Google's revenue in Russia was also drastically reduced when a Russian TV channel claimed authorities seized 1 billion rubles (about US$15 million) from Google in April after being unable to restore access to the channel's YouTube account.
Russia's communications regulator also threatened to impose an 8 million ruble (US$95,000) fine on Google after it removed 'illegal' videos from YouTube. Google's income earned in Russia is said to be used up only to pay fines for the many violations committed. This condition makes Google unable to maintain its branch in Russia.
"The seizure of Google Russia's bank accounts by Russian authorities has left our office in Russia unable to function, including hiring and paying employees, paying suppliers and vendors and meeting other financial obligations," a Google spokesperson said in a statement reported by The Verge.
After Russia invaded Ukraine beginning in March, Google suspended ad sales in Russia. Google's YouTube also banned ads on Russian government-backed media channels and blocked them entirely.
"Google Russia has published a notice of its intention to file for bankruptcy," he added.
There has been no report on how much money Google has spent on the fines imposed by the Russian government. Russia does not ban Google services in the country, but Meta's Facebook and Instagram are not licensed to operate there. However, Google says that its free services will still be available in Russia.
"People in Russia rely on our services to access quality information and we will continue to provide free services like Search, YouTube, Gmail, Maps, Android and Play," added a Google spokesperson.
Google became the first major tech company to file for bankruptcy in Russia due to its invasion of Ukraine. Although many activities have also been suspended by the Russian government, Apple, Meta and Microsoft have not declared bankruptcy like Google. Besides Google, McDonald's has also announced that it will leave Russia. The fast food company is said to be selling its restaurants after more than 30 years in the country.
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