Google to spend $500M to revamp compliance structure after shareholders seek culture change

Google agreed to spend $500 million over 10 years to overhaul its compliance structure, to settle shareholder litigation accusing the search engine company of antitrust violations, settlement papers show.The preliminary settlement of so-called derivative litigation against officials at Google parent Alphabet, including Chief Executive Sundar Pichai and Google co-founders Sergey Brin and Larry Page, was filed late on Friday.It requires approval by US District Judge Rita Lin in San Francisco.The changes include creating a standalone board committee to oversee risk and compliance, previously the responsibility of the Alphabet board’s audit and compliance committee.Alphabet would also create a senior vice president-level committee to address regulatory and compliance issues, reporting to Pichai, and a compliance committee consisting of Google product team managers and internal compliance experts.Google denied wrongdoing in agreeing to settle.“Over the years, we have devoted substantial resources to building robust compliance processes,” the Mountain View, California-based company said on Monday.“To avoid protracted litigation we’re happy to make these commitments.”Shareholders led by two Michigan pension funds accused Google executives and directors of breaching their fiduciary duties by exposing the company to antitrust liability related to 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,” resulting in “deeply rooted culture change,” the shareholders’ lawyers said.The changes must remain in place at least four years.

Shareholders would not be paid.Patrick Coughlin, a lawyer for the shareholders, in a Monday interview called the settlement one of the largest by a company to fund regulatory compliance committees.“We didn’t see the board getting the fulsome reports it should have gotten regarding...