Google has agreed to spend $500 million over 10 years to revamp its compliance structure, settling shareholder litigation that accused the company of antitrust violations, according to court filings.
The preliminary settlement, filed late Friday in federal court in San Francisco, involves derivative claims against officials at Google parent Alphabet, including CEO Sundar Pichai and co-founders Sergey Brin and Larry Page. It still requires approval from U.S. District Judge Rita Lin.
Under the settlement terms, Alphabet will establish a standalone board committee dedicated to overseeing risk and compliance. This responsibility previously fell under the board’s audit and compliance committee.
The company will also form a senior vice president-level committee reporting directly to Pichai to address regulatory and compliance matters. In addition, a compliance committee composed of product team managers and internal experts will be created.
The litigation was brought by shareholders led by two Michigan pension funds, who accused Alphabet’s leadership of breaching fiduciary duties by exposing the company to antitrust risk in its search, Ad Tech, Android, and app distribution businesses.
“These reforms, rarely achieved in shareholder derivative actions, constitute a comprehensive overhaul of Alphabet’s compliance function,” the shareholders’ attorneys said, calling the deal a step toward “deeply rooted culture change.”
The reforms must remain in effect for at least four years. The shareholders will not receive a payout under the agreement.
Google has denied any wrongdoing in connection with the settlement. The Mountain View, California-based company did not respond to a request for comment on Monday.
The deal was disclosed on the same day U.S. District Judge Amit Mehta in Washington concluded a hearing on remedies in a separate antitrust case, where he previously ruled that Google violated federal law to maintain its search dominance.
The Justice Department has proposed that Google be required to divest its Chrome browser and share search data with competitors. Mehta is expected to issue a decision by August.
In the shareholder case, attorneys plan to request up to $80 million in legal fees and expenses, in addition to the $500 million Alphabet has agreed to allocate for compliance changes.
