Google has agreed to completely overhaul its compliance structure over the next decade with a budget of $500 million to resolve a shareholder lawsuit alleging antitrust violations. The preliminary settlement, which includes a derivative lawsuit against Alphabet executives—including CEO Sundar Pichai and founders Sergey Brin and Larry Page—was filed in court Friday and is currently awaiting approval from U.S. District Judge Rita Lin in San Francisco.
The agreement mandates significant internal reforms within Google. Alphabet will establish a dedicated board committee to oversee risk and compliance processes, independent of the audit committee. It will also create a new committee at the senior vice-presidency level responsible for regulatory and compliance matters, reporting directly to Sundar Pichai.
A separate compliance committee, comprised of product team managers and internal audit specialists, will also be established to coordinate compliance activities.Despite accepting the settlement, Google maintains it has not engaged in any illegal behavior. In a statement, the company said, “Over the years, we have dedicated significant resources to building robust compliance processes. We gladly accepted these commitments to avoid a lengthy litigation process.”
The lawsuit was filed by two Michigan-based pension funds and accused Google executives of exposing the company to antitrust risks through its practices in search engine, advertising technology, Android, and app distribution. The plaintiffs’ lawyers described the settlement as a rare and significant victory that will create a “radical transformation” in Alphabet’s compliance culture. The structural reforms introduced under the terms of the agreement will be maintained for at least four years. However, no direct financial compensation will be paid to shareholders. Speaking on behalf of the plaintiffs, lawyer Patrick Coughlin said the settlement was “one of the largest ever” in terms of resources companies have spent on regulatory compliance. “The board wasn’t receiving adequate reports on antitrust risks. It didn’t do many things it should have done before,” he said. This development coincided with a hearing held on the same day that U.S. District Judge Amit Mehta in Washington ruled in August 2024 that Google violated federal antitrust law. Mehta is expected to decide by August how to intervene in Google’s dominance over its search engine. The US Department of Justice had recommended that Google sell its Chrome browser and share search data with competitors. In derivative lawsuits, shareholders sue on behalf of the company, and in this case, shareholders’ lawyers plan to claim up to $80 million in legal fees and expenses in addition to a $500 million compliance budget.
