Google is still awaiting a court ruling on its search engine monopoly – the company plans to appeal– but in the meantime, it also has to answer to its shareholders. According to The Financial Times, Google’s parent company, Alphabet, has reached a tentative agreement with shareholders who also sued the company for Google’s anticompetitive behavior, which they claimed caused “reputational damage” and “significant costs” to the company.
The new settlement will reportedly force Alphabet to rebuild its “global compliance structure” and will cost the company at least $500 million over the next 10 years to do so. In the simplest case, this means the creation of a specific committee within Alphabet’s board of directors to oversee regulatory issues, of which Google has accumulated a lot over the past few years.
“The new body, made up of senior executives, will report directly to chief executive Sundar Pichai,” the FT writes, while another group “made up of product managers and internal compliance experts” will provide advice. The goal is to prevent Alphabet and its subsidiaries from making the kind of business decisions that led to Google being found a monopoly on several counts. However, the judge will have to approve the settlement agreement before the company can move forward.
The case against Alphabet officials such as Sundar Pichai and Sergey Brin was originally filed by the Michigan State Pension Fund on behalf of shareholders back in 2021. Compared to the structural changes demanded by the US Department of Justice, paying a little money and forming a few committees is a small requirement. In a general context, changing Alphabet’s approach to regulation is likely to be one of the minor ways that the company will be forced to change its business in the next few years.
