The ongoing conflict between Russian authorities and Google LLC has escalated dramatically, with the Federal Bailiff Service of Russia (FSSP) recovering a substantial sum of 13.4 billion rubles in fines against the company since 2021. This amount constitutes approximately 40% of the total fines issued for violations of Russian law, which have reached an overall figure of 32.8 billion rubles. This information was revealed by the press service of Roskomnadzor, the federal agency responsible for overseeing communications in Russia.
Out of the total imposed fines, a staggering 19.5 billion rubles remain unpaid. According to Roskomnadzor, the FSSP managed to collect two significant turnover fines; one of 7.2 billion rubles in 2021, and another of 4.6 billion rubles in 2023. Furthermore, only 1.5 billion rubles have been recovered from a fine exceeding 21 billion rubles, which was levied in 2022. The fines specifically stem from Google’s failure to remove content that is prohibited in Russia, as stipulated by local laws.
Despite these financial recoveries, the overall picture remains bleak. Dmitry Peskov, the press secretary of the Russian President, previously commented on Google's general behavior, indicating that, “Such requirements simply demonstrate the essence of the claims of Russian channels against Google.” It appears there are currently no ongoing discussions between Google and Roskomnadzor, which suggests a significant rift in communication between the tech giant and Russian authorities.
State Duma deputy Anton Nemkin remarked on Google's perceived systematic disregard for Russian legislation, alleging that the company's selective payment of fines undermines confidence and questions its commitment to doing honest business in Russia. “Such tactics undermine confidence in the company and call into question its willingness to conduct honest business in Russia,” he stated.
Legal experts have weighed in on the implications of the fines and how they affect Google’s operations in Russia. David Kononov, head of the Antikrizis i Bankrotstvo practice at the law firm Lemchik, Krupsky and Partners, explained that the likelihood of Google settling its remaining debts is contingent upon the corporate decisions made at Google's headquarters, along with the availability of cash flow that complies with sanctions regulations. He further pointed out that the bankruptcy process dictates that obligations to certain creditors must be met, although fines may only be settled if the company has sufficient assets in Russia.
Kononov warned that if Google lacks significant assets, the actual payment of remaining fines could remain uncertain. In a particularly concerning situation, the Russian subsidiary of Google has reportedly only about 30 million rubles in assets, while the debts exceed 50 billion rubles.
On top of these ongoing penalties, sources reveal that Google is under judicial pressure over its responsibilities towards 17 Russian TV channels, mandated by law to address blocked accounts on YouTube. The obligations were established after the companies 'Tsargrad' and RIA FAN filed lawsuits for restoring their channels that had been disabled. The court previously mandated compliance in 2021 but faced non-fulfillment from Google.
Kononov noted that fines accruing from non-compliance increase significantly over time, adding further urgency for resolution. “After that, a penalty of 100 thousand rubles began to accrue for each day of non-compliance,” he detailed, shedding light on the gravity of the repercussions facing the company.
The legal entanglements extend beyond mere fines, as Google also faces demands exceeding 1.81 trillion rubles put forth by Russian television channels regarding its failure to restore their accounts on YouTube, which have been blocked since 2020. The magnitude of this amount can be overwhelming, considering its significance vastly surpasses the company's worth.
Legal discourse suggests the resolution for creditors may only be achievable through experiencing subsidiary liability, involving the recovery of debts from associated third parties. Nonetheless, as Kononov indicated, navigating international restrictions complicates this recovery process due to Google's corporate isolation.
The situation continues to evolve, with ongoing checks on Google’s operations in Russia and a growing sense of urgency as authorities ramp up enforcement against violations of local laws. In July 2024, it was revealed that Roskomnadzor had mandated CEO Sundar Pichai to restore access to over 200 blocked accounts, emphasizing the continued scrutiny of the company's practices.
In late October 2024, the severity of Google's noncompliance resulted in a court imposing an astounding 2 trillion rubles penalty for blocking Russian TV channels on YouTube. Such punitive measures exceed the aggregate global net wealth and underscore the gravity of the situation facing the company. “Although this specifically formulated amount, I even cannot pronounce this figure, but it is more symbolic,” stated Peskov commenting on the enormity of the demands.
The relationship between Russian regulatory authorities and Google LLC remains fraught with tension and uncertainty, with ongoing investigations into its financial practices and hesitations over its ability to comply with legal obligations. As the story unfolds, all eyes will remain on how Google navigates this complex web of financial, legal, and political challenges to maintain its operations in Russia.
