After president Vladimir Putin called the internet a “CIA project,” this was probably just a matter of time: Google confirmed late Thursday (Dec. 11) that it’s getting its engineers out of Russia. According to tech site The Information, which first reported the news (paywall), its 50 mostly Moscow-based engineers will have the option to leave the company or relocate to other countries. Google will, however, keep marketing and sales teams in Russia, and it’s not shutting down its services; on the contrary, company sources have told both Western and Russian media that it plans to up its investment in Russia next year.
The most obvious reason for the decision is a new Russian law—originally due to come into force in 2016, but recently moved up to Jan. 1, 2015—that requires internet firms to store data on Russian citizens within the country. Google reportedly doesn’t have servers in Russia (we’ve asked the company for confirmation), so as Jan. 1, less than three weeks from now, it could be breaking the law, and shortly after that, its services could be blocked. It may be assuming that it will need to have most of its engineers out of the country by then to keep its Russian-language services running, if only for Russian-speakers outside the country.
Or it may be hoping for some kind of truce with authorities, and just taking precautions. Russian newspaper Vedomosti quotes (link in Russian) “a source familiar with Google managers” saying that the move “isn’t connected with any specific law adopted in the country. It’s a result of the overall situation… specifically all the internet-related laws that have been adopted and overall because of the cooling of Russian-American relations,” in the newspaper’s words. Engineers, the article notes, can do their work from anywhere in the world, while marketing and sales people need to be in Russia. By reducing its footprint, Google may simply be minimizing the disruption it will suffer if it ever has to pull out of the country altogether, whether because of Russian laws or tougher Western sanctions.
Google is not the first Western tech company to do this. Adobe Systems shut down its offices in September, reportedly over similar concerns about data laws and sanctions, though it will keep selling online. With the sanctions, as well as plunging oil prices, battering the economy—Russia’s central bank this week had to hike its interest rates for the fifth time this year—the Kremlin is increasingly beleaguered. In recent years Russia has passed a series of laws enhancing internet surveillance and clamping down on social networks and bloggers. Last September, the state telecoms regulator told Google, Facebook and Twitter they must register as “organizers of information distribution” and comply with the law on data storage by the end of this year.
That may mean other companies soon join Adobe and Google on the way to the exit. If so, many Russian internet entrepreneurs will be quite happy. Strangely, one of the few who might be bothered is the head of Yandex, Google’s chief local competitor. This week, a day before the news about Google broke, he gave an interview to Vedomosti (Russian). In it he complains about tricks he says Google has used to win market share, but adds, ”We’ve always been in favor of real competition. If there’s no Google, you won’t be able to get anybody to work. And if there’s no quality, no other markets will beckon. And we want to be a global company.”