Alphabet has agreed to a preliminary settlement with shareholders who sued the company over Google’s anticompetitive practices, requiring the tech giant to spend at least $500 million over 10 years to overhaul its compliance structure.

The settlement addresses shareholder claims that Alphabet allowed Google’s monopolistic behaviour, exposing the company to reputational damage and substantial legal costs.

The lawsuit was originally filed in 2021 by a Michigan pension fund representing shareholders against Alphabet executives, including CEO Sundar Pichai and co-founder Sergey Brin.

Under the settlement terms, Alphabet must rebuild its “global compliance structure” to prevent future anticompetitive business decisions.

The new framework will include establishing a committee within Alphabet’s board specifically to oversee regulatory issues, which have proliferated for Google in recent years.

The compliance restructuring will create multiple oversight bodies, according to The Financial Times.

A senior executive committee will report directly to CEO Sundar Pichai, while another group consisting of product managers and internal compliance experts will provide consultation on regulatory matters.

The settlement requires judicial approval before implementation can proceed.

The agreement comes as Google continues fighting a separate federal antitrust ruling that found the company maintains an illegal monopoly in the search engine market, which Google plans to appeal.

Compared to the structural changes demanded by the US Department of Justice in the search monopoly case, the shareholder settlement represents a relatively minor business adjustment.

The DOJ has proposed more dramatic remedies, including potentially forcing Google to divest its Chrome browser and licensing its search technology to competitors.

The $500 million compliance investment reflects shareholders’ concerns that inadequate regulatory oversight exposed Alphabet to significant legal and reputational risks.

The settlement aims to institutionalise better regulatory decision-making processes across Alphabet’s subsidiaries to avoid future antitrust violations.

Industry observers view the settlement as one of several regulatory challenges Alphabet faces globally, with antitrust investigations and penalties mounting across multiple jurisdictions.

The compliance restructuring represents an attempt to proactively address regulatory risks while Google continues defending against government antitrust actions.

The preliminary nature of the settlement means final terms could still change pending court approval, though the core requirements for enhanced compliance oversight and substantial financial commitment appear established in the agreement framework.