Qualcomm Settles Lawsuit for $75 Million Over Sales and Licensing Practices
Qualcomm to pay US$75 million in settlement over sales and licensing practices. Shareholders accused Qualcomm of inflating share price by bundling chip sales and technology licensing. Settlement still requires approval from U.S. District Judge
Qualcomm, the chipmaker, has agreed to pay US$75 million to settle a lawsuit brought by shareholders who accused the company of defrauding them by concealing its anticompetitive sales and licensing practices.
The preliminary settlement, which is an all-cash agreement, was filed on Tuesday in the federal court in San Diego.
The settlement still needs approval from U.S. District Judge Jinsook Ohta, who certified the lawsuit as a class action in March 2023. In reaching the settlement, Qualcomm and six individual defendants, including former chief executives Paul Jacobs and Steven Mollenkopf, have denied any wrongdoing.
The San Diego-based company has not yet responded to requests for comment regarding the settlement. The shareholders alleged that Qualcomm artificially inflated its share price between February 2012 and January 2017 by misleadingly presenting its chip sales and technology licensing as separate businesses. In reality, Qualcomm bundled them together to stifle competition.
This practice allegedly resulted in an unfair advantage for the company. This is not the first legal trouble for Qualcomm. In January 2017, both the Federal Trade Commission and Apple filed separate lawsuits against the company, accusing it of attempting to monopolise the market for baseband processors, a type of chip used in cellphones.
Apple claimed that Qualcomm used its dominant position to overcharge for chips and impose burdensome terms for technology licenses. Qualcomm vehemently denied these allegations, but the company's share price took a hit, falling 13% on the first full trading day after Apple filed its lawsuit.
Qualcomm to pay $75 million in settlement over sales and licensing practices
Shareholders accused Qualcomm of inflating share price by bundling chip sales and technology licensing
Settlement still requires approval from U.S. District Judge
Source: REUTERS