Google faces huge fines in Russia as Putin ally wins lawsuit

Alphabet Inc.’s Google is facing potentially heavy fines in Russia after a court ruled it must unblock the YouTube account of a TV channel owned by a sanctioned ally of President Vladimir Putin.

The Moscow Ninth Arbitration Court of Appeals on Thursday upheld an April ruling that ordered the U.S. technology giant to restore the Tsargrad account or face a daily fine, the channel said in a statement Thursday. Settlement talks between the two sides failed to yield a deal in August. 

A Google representative in Moscow confirmed the judgment and declined further comment. The court press service didn’t answer calls.

Russia has stepped up confrontation with foreign social media and internet companies in what the government calls a campaign to uphold its digital sovereignty. Regulators have levied fines and slowed content in a bid to force companies including Google and Twitter Inc. to delete posts encouraging unauthorized protests and other material deemed illegal.

In September, Google and Apple Inc. removed a protest-voting app from their Russian stores as parliamentary elections got underway after the authorities threatened to imprison their local staff.

Google now faces a daily fine of 100,000 rubles ($1,360), which will double each week that the company refuses to comply. Tsargrad said the court capped the total fine at 1 billion rubles in the first nine months and then it will be allowed to grow further. Under Russian law, there’s no upper limit on the potential fines.

Google earned revenues in Russia of around 85 billion rubles ($1.16 billion) in 2020, according to the Spark-Interfax database. 

Tsargrad, which sought the fines and will receive any collected in the case, is owned by Kremlin ally Konstantin Malofeev, who was sanctioned by the U.S. and European Union in 2014 for allegedly funding the pro-Russian rebellion in eastern Ukraine.

Google said the July 2020 blockage was in response to the “violation of legislation on sanctions and trade rules.” Tsargrad, which says it promotes traditional Orthodox Christian traditional values, had a million YouTube subscribers.

In court filings, Google cited testimony showing that it could face fines in the U.S. if it failed to observe the sanctions.