Alphabet to Pour $500 Million Into Sweeping Internal Reforms (2)

Alphabet Inc. has agreed to spend $500 million to improve its global regulatory compliance structure as a proposed resolution to a shareholder suit stemming from US antitrust allegations, according to a federal court filing.

The “comprehensive” reforms at Google LLC and its parent company won’t be limited to the antitrust arena and could “set a benchmark for other major American corporations,” shareholders who sued company leaders said. They asked the US District Court for the Northern District of California on May 30 to approve the settlement.

The investors alleged Alphabet engaged in “prolonged and ongoing monopolistic and anticompetitive business practices” in advertising, searching, Google Play services, and other areas. The conduct put the company at risk for billions of dollars in fines and damaged its reputation, the investors said in consolidated derivative litigation.

The practices exposed Alphabet to antitrust investigations and enforcement actions by the US Department of Justice, state attorneys general, the House of Representatives, foreign governments, and private plaintiffs, the shareholders said in seeking approval for the settlement.

The settlement amount would fund three categories of reforms, according to the investors. First, Alphabet would switch regulatory oversight from the Audit and Compliance Committee to a new Risk and Compliance Committee, they said. “Relatively few major public companies have such a dedicated committee,” they said. “Adoption of this innovation by Alphabet may well spur other technology companies to follow suit.”

Second, Alphabet will implement “elaborate” mechanisms to improve compliance, including committees at different levels and new policies and processes, they said.

Finally, Alphabet will improve monitoring by preserving communications that were “previously ephemeral,” the investors said.

The $500 million funding level followed “quite challenging negotiations,” they said.

A proposed class action alleging Alphabet misled investors about advertising technology monopolization and privacy issues, pending in the same district, was recently referred to private settlement talks.

Scott & Scott Attorneys at Law LLP is lead counsel for the investors. Freshfields US LLP represents the individual defendants and Alphabet, which is a nominal defendant.

The case is In re Alphabet, Inc., S’holder Deriv. Litig., N.D. Cal., No. 3:21-cv-09388, motion 5/30/25.