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Google closes Russia office after Internet crackdown

Philippe Huguen | AFP | Getty Images

Google is planning to close its Russian engineering operations, amid growing disquiet about new Russian internet laws which could see other tech companies leave the country.

The Internet search giant is closing the department, but will offer its close-to 100 engineers, most of whom work in Moscow, new jobs elsewhere. It will keep its other Russian operations open, and has frequently made similar internal changes in the past from other countries.

A Google representative said: "We are deeply committed to our Russian users and customers and we have a dedicated team in Russia working to support them".

Russia has recently introduced new laws aimed at keeping data stored by Internet companies on Russian citizens inside the country. The government has also increased its requests to remove links from Google, a ploy usually used to get rid of unflattering stories or comments.

This changing climate in Russia may lead more Internet companies to move their operations to other countries in the region, including neighboring Ukraine.

Dmytro Shymkiv, former head of Microsoft Ukraine and deputy head of presidential administration in the recently formed Ukrainian government, told CNBC that the country could "absolutely" take advantage of concerns over these changes in Russia. Google already has operations in Ukraine, and bought Ukrainian facial recognition technology company Viewdle in 2012.

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"Most Russians don't want their data to leave Russia for the United States, where it can be hacked and given to criminals... Our entire lives are stored over there," Russian MP Vadim Dengin said when the laws were introduced earlier this year.

Google Chairman Eric Schmidt has previously said that Russia is "on the path" towards Chinese-style censorship of the Internet.

In the past, Russia has attracted plenty of investment from global tech companies, and has home-grown Internet giants, including, thanks to a highly-skilled and relatively cheap workforce. The technology industry is often spoken of as one of the country's big business success stories outside the crucial oil and gas sector.

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Yet Google is not the only company to scale down its operations recently, with software company Adobe closing its Russian operations in September.

There has also been pressure on home-grown tech companies. Pavel Durov, the founder of Russian Facebook equivalent VKontakte, left the country in April, after a row with Russian authorities over requests to hand over the personal details of Ukrainian users.

Russian police recently searched the offices of Lamoda, a Russian e-commerce player backed by Western investors.

- By CNBC's Catherine Boyle