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Google may withdraw from Russia or annoy the country's regulators from afar if it files for bankruptcy.
Alena Georgobiani is a Russian liberal, according to her. The PR professional, who lives in Moscow, prefers Google's search results to those of local rival Yandex. She uses Google's cloud storage service to save her files and downloads programs from the Google Play Store to her Android phone. She utilizes Google Meet for the majority of her professional calls since Microsoft Teams left Russia in March. For the past 17 years, she has used Gmail as her primary email account.
On her smoking breaks, she used to spend roughly 200 rubles ($3) every month to watch ad-free YouTube movies. Her YouTube premium subscription, however, was terminated in early March when Google froze its advertising operations in Russia in reaction to the conflict in Ukraine. YouTubers and advertisers lost money, but everyone in Russia was allowed to watch videos on the network for free without adverts. "I haven't seen advertising since the new monetization strategy was implemented; I only see them when I use a VPN," Georgobiani says, referring to a virtual private network that allows users to surf the internet as if they were in another country.
Georgobiani's relationship with Google exemplifies how deeply Google is rooted in Russia. According to data analytics firm Statista, there were more than 91 million YouTube users in Russia in 2021, a country with a population of 144 million people. Google's commercial empire, on the other hand, is disintegrating. Due to "payment system interruption" linked to Western sanctions, the company declared on March 10 that it will cease all paid-for services in Russia. According to employees' LinkedIn profiles, Google began shifting people from its Moscow branch to other countries in the same month. Many moved to Dubai, United Arab Emirates. After a court decision blocked its main bank account, Google's Russian business filed for bankruptcy in May.
The company may not be able to make money in Russia without its bank account, but it has committed to continue operating. A Google spokeswoman told WIRED, "People in Russia rely on our services to get reliable information." However, it is unclear what function Google will play in Russian society without a local unit. Experts are split on whether these changes mark the beginning of Google's demise in Russia, or whether the firm will shift to a more antagonistic, offshore model, similar to Telegram's messaging software.
According to Laura Brank, head of US law firm Dechert's Russia practice, Google's Russian account has been banned because it has not paid fines for refusing to take down content that authorities consider illegal. "That's a standard procedure for nonpayment of a court order, so it's all legitimate on paper," she adds. "In Russia, it is said that there is no rule of law. However, there are regulations in place, and the authorities will adhere to them, so that when Russian consumers are outraged about a service being blocked, they can say, "Look, we followed the rules."
However, Google has not yet been blocked. Instead, it's one of the final bastions of US tech in the country, after Facebook, Instagram, and Twitter were blocked earlier this year, and Microsoft and Amazon voluntarily left. Although Google News was shut down in March in punishment for linking to sites with "unreliable" information regarding the Ukraine crisis, Russians can still use the rest of the company's services.
According to some observers, the government believes YouTube is too popular to prohibit without risking political backlash or encouraging the use of VPNs. Others, however, think that the Google exception is linked to the company's trump card, which is held by nearly 75% of Russians. "Most smartphones in Russia are Android [Google's operating system], not Apple, because Android is cheaper," says Sergey Sanovich, a Princeton University research associate. "Censoring mobile data and applications is substantially more difficult than censoring webpages."
According to Karen Kazaryan, director and founder of the Moscow-based Internet Research Institute, blocking some Google services without harming others could be tough. "The Google cloud infrastructure is a really complicated thing," adds Kazaryan. "When you try to block something, you may unintentionally block something unrelated, causing some important services to stop working."
Russia's invasion of Ukraine further exacerbated the issues that Google's Ukrainian business was already experiencing. The Moscow office has struggled with increasingly severe internet restrictions and a regular stream of fines ranging from $11,000 to $100 million for refusing to take down content over the years. YouTube's content filtering standards would not alter as a result of the company's bankruptcy case, Google told WIRED.
This isn't the first time Google has shut down a Moscow office. It relocated its engineers out of the city in 2014 in protest of stricter data protection regulations. However, the stakes have risen in recent years. Russian authorities visited the house of one of Google's top executives in September 2021, threatening her with prison unless she removed an app related to campaigner Alexei Navalny from the Google Play Store. According to the Washington Post, when Google put the executive up in a hotel under a different identity, the same agents showed up at her room to inform her that the clock was still ticking. The app was removed in a matter of hours.
Part of the reason Google has survived in Russia despite so many hurdles, according to Kazaryan, is that its founders is Russian. He explains, "I suppose it is a little nostalgic because of Sergey Brin." Brin, who was born in the Soviet Union and lived there until he was five years old, has already discussed how his upbringing in a political system that controlled speech influenced Google's policies. In 2010, he told The New York Times, "It has obviously affected my beliefs, and some of my company's ideas."
The company's Russian affiliate also brought in billions of dollars. Google announced in an earnings call that Russia would account for 1% of its global revenues in 2021, up from 0.5 percent the year before, totaling $2.5 billion—the same amount it earned from the UK in 2020. According to Dan Ives, a Wedbush analyst, the corporation would have expected those sales to rise. "Google followed in the footsteps of Microsoft, where there was a lot of expectation that they would be able to expand within Russia in the next decades," he says.
The bank account of Google has been frozen as a result of the company's ongoing battle with the Russian government over what it perceives to be objectionable content on its platforms. The irony is that without a Russian subsidiary, Russian authorities will find it even more difficult to compel Google to follow content filtering guidelines. A government spokesperson, Maria Zakharova, used a fresh technique on May 26: she threatened to deport an American journalist if YouTube stopped another briefing by Russia's foreign affairs ministry. "We just came in and warned them, 'You block another briefing, one American journalist or media outlet goes home,'" she told TASS.
"Russian government punitive acts, such as attempting to punish Western journalists over Google's content moderation judgments, suggest that Russia lacks effective instruments to coerce Google," writes Emerson T. Brooking, a resident senior fellow at the Atlantic Council, a US think tank. He predicts that rather than being blocked in Russia, Google will adopt a noncompliant Telegram-style role.
"There is no Great Firewall in Russia." "Russia lacks a strong indigenous tech sector capable of filling the shoes of these huge Western corporations," he claims. "Russia will find it increasingly difficult to force Google as the business withdraws its workers and physical equipment."