Google has pledged an investment of $500m over the next decade to enhance its corporate compliance framework. This move is part of a settlement to address shareholder litigation that accused Google of antitrust violations, according to reporting by Reuters.
Shareholders, including two pension funds from Michigan, alleged that top executives at Alphabet, Google’s parent company, neglected their fiduciary duties by allowing the company’s business practices to expose it to antitrust liabilities. The lawsuit attributed these risks to Google’s operations in search, Ad Tech, Android, and app distribution sectors.
The preliminary settlement involves key figures at Alphabet, notably CEO Sundar Pichai and co-founders Larry Page and Sergey Brin. The deal awaits approval from US District Judge Rita Lin in San Francisco.
Formation of new risk and compliance board committee
As part of this agreement, Alphabet intends to establish a dedicated board committee for risk and compliance, assuming responsibilities previously managed by the board’s audit and compliance committee.
The proposed changes detailed in Friday’s court filings illustrate a shift in Google’s compliance oversight. The new risk and compliance committee will be composed of independent directors. Supporting this initiative will be two additional committees, one formed by vice presidents and another including managers from across Google’s diverse product teams. Patrick Coughlin, legal counsel for the shareholders, highlighted the rarity and significance of such reforms in shareholder derivative actions. “We didn’t see the board getting the fulsome reports it should have gotten regarding antitrust risks,” Coughlin said.
These newly implemented reforms are slated to remain active for at least four years and will not result in direct financial compensation for shareholders.
Despite reaching a settlement, Google maintains its stance of having committed no wrongdoing. “Over the years, we have devoted substantial resources to building robust compliance processes,” the company stated. “To avoid protracted litigation we’re happy to make these commitments.”
In parallel developments, Google has recently declared its plans to challenge a US court decision concerning its online search operations. The trial, initiated by US regulators in response to accusations that Google holds an unlawful monopoly in the online search and digital advertising sectors, commenced in 2023. The court delivered its initial verdict in August 2024, and the case has now progressed to the remedies stage. Google’s decision to appeal follows District Judge Amit Mehta’s suggestion of milder measures to boost market competition, in contrast to the original proposal by Department of Justice lawyers to compel Google to divest its search business.
Last month, Google consented to a $1.37bn settlement with the state of Texas to address claims of data privacy violations. Texas Attorney General Ken Paxton revealed the settlement, which resolves two lawsuits concerning three Google products that allegedly violated Texas consumer protection laws. Filed in 2022, the lawsuits charged Google with illegally tracking and gathering user data related to geolocation, incognito searches, and biometric information.
Read more: Google reaches $1.38bn settlement with Texas over data privacy allegations
