Okay, Google: how the company found itself in the clutches of sanctions and penalties

The U.S. company Google, a subsidiary of Alphabet Inc., faces a significant risk in Russia - a Moscow court has decided to impose a progressive court penalty on its structures, the amount of which could quickly exceed the amount of revenue of the Russian company Google LLC. It will begin to be levied if the court ruling on restoring and unblocking the account of the Tsargrad TV channel on the Youtube video service comes into force, but Googlе fails to comply with it. The situation of the U.S. company is aggravated by the fact that Tsargrad TV falls under US sanctions, and unblocking the account of the TV channel threatens Googlе with punishment in its own jurisdiction.

However, the U.S. sanctions regulator OFAC may take into account the specifics of the digital business and not punish Google tellingly, said Marat Samarsky, a lawyer of the International Economic Compliance practice of the law firm ART DE LEX (its lawyers represented Tsargrad Media in court). The U.S. Internet company Amazon.com Inc. paid only $134.5 million for systematic violations of several sanctions regimes, including sanctions on the Crimea, Samarskiy cites an example. 

Google can also apply to the U.S. sanctions regulator OFAC for a special license to enforce the decision of the Russian court. And here the formula of judicial forfeit can play into the hands of the American company. «Keeping OFAC from taking a hard line - not issuing (this) license - could be a progressive penalty. The regulator will consider the consequences for the company to be clearly disproportionate to its actions in Russia and will most likely grant Google a license,» Samarsky believes.

Alexandra Kozina, a lawyer in the litigation practice of ART DE LEX points out that OFAC General License No. 9 of December 19, 2014 authorized the direct or indirect export or re-export of free Internet services from the United States or by U.S. persons. The case of Youtube, barring monetization, could fall under that permission. «But it will all depend on OFAC's position in this particular case,» Kozina adds.

The complaint was filed in connection with the fact that the agreement on the use of the YouTube service contains provisions that allow the arbitrary blocking of channels and content, the representative of ROCIT, head of ART DE LEX Antitrust Regulation practice group Sergei Kazarian told Interfax. According to Kazarian, ART DE LEX cooperated with VCIOM (Russian Public Opinion Research Center) in conducting a survey of the opinions of consumers and producers of video content. «Reports prepared by VCIOM confirmed the existence of a separate market of social network video hostings and the dominant position of Google (YouTube) in this market. The reports were submitted to the FAS (Federal Antimonopoly Service),» Kazarian added.

Read the article in more detail at: https://www.interfax.ru/russia/764709