Google Agrees to $500 Million Compliance Overhaul to Settle Shareholder Antitrust Lawsuit

Google has agreed to invest $500 million over the next decade to revamp its compliance framework as part of a settlement in shareholder litigation accusing the company of antitrust violations. The preliminary agreement targets officials at Google’s parent company, Alphabet, including CEO Sundar Pichai and co-founders Sergey Brin and Larry Page. The settlement aims to strengthen oversight and prevent future regulatory risks.

Key changes include the creation of a dedicated board committee focused solely on risk and compliance, separate from Alphabet’s current audit and compliance committee. Additionally, a senior vice president-level committee will be established to handle regulatory and compliance issues, reporting directly to Pichai. A compliance committee involving Google product managers and internal experts will also be formed to enhance internal controls.

Although Google denies any wrongdoing, the company expressed a willingness to settle to avoid prolonged litigation, emphasizing its ongoing commitment to robust compliance measures. The shareholders, led by Michigan pension funds, accused Google’s executives and board members of failing to adequately manage antitrust risks related to its search engine, advertising technology, Android platform, and app distribution businesses.

The settlement is seen as a rare and significant overhaul of Alphabet’s compliance culture, requiring the new governance measures to be maintained for at least four years. Shareholders will not receive financial payouts, but their lawyers plan to seek up to $80 million in legal fees on top of the compliance funding. The case still requires approval from a U.S. District Judge in San Francisco.

This development comes alongside a separate federal antitrust case, where a judge found Google had illegally maintained search dominance and is considering remedies, including forcing the company to sell its Chrome browser and share search data with competitors. The outcome of that case is expected by August, underscoring the ongoing scrutiny Google faces from regulators and shareholders alike.

Source: Reuters