Google (GOOGL) to Spend $500M to Settle an Investor Lawsuit

Tech giant Google (GOOGL) has agreed to spend $500 million over the next 10 years to overhaul its compliance systems in order to settle a shareholder lawsuit accusing the firm of antitrust violations. The lawsuit targeted top Alphabet officials, such as CEO Sundar Pichai and co-founders Larry Page and Sergey Brin. Filed on Friday, the preliminary settlement must still be approved by U.S. District Judge Rita Lin in San Francisco.

As part of the deal, Google will create a separate board committee focused solely on risk and compliance, which will shift this responsibility away from the broader audit and compliance committee. The company will also set up a senior-level group that reports directly to Pichai and a compliance committee made up of Google product managers and internal experts. These changes must remain in place for at least four years, and no monetary payout will be made to shareholders.

Although Google denies any wrongdoing, it said it agreed to the settlement to avoid a drawn-out litigation. The shareholders, including two Michigan pension funds, claimed that the board failed to prevent antitrust risks in areas like search and Android. Their lawyers called the deal a rare and major win in shareholder lawsuits by saying that it brings a meaningful shift in corporate culture. Meanwhile, another antitrust case is pending, where the U.S. Justice Department may force Google to sell its Chrome browser and share search data with competitors.

Is Google Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 29 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $199.14 per share implies 18% upside potential from current levels.

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