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Qualcomm reaches $75 million settlement over sales and licensing practices

Published Jun 18, 2024 04:51PM ET Updated Jun 18, 2024 05:09PM ET
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© Reuters. FILE PHOTO: with a displayed Qualcomm logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
 
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By Jonathan Stempel

(Reuters) - Qualcomm (NASDAQ:QCOM) agreed to pay $75 million to resolve a lawsuit in which shareholders accused the chipmaker of defrauding them by hiding its anticompetitive sales and licensing practices.

A preliminary all-cash settlement was filed on Tuesday with the federal court in San Diego.

It requires approval by U.S. District Judge Jinsook Ohta, who certified the lawsuit as a class action in March 2023.

Qualcomm and six individual defendants, including former chief executives Paul Jacobs and Steven Mollenkopf, denied wrongdoing in agreeing to settle.

The San Diego-based company did not immediately respond to a request for comment.

Shareholders accused Qualcomm of artificially inflating its share price between February 2012 and January 2017 by repeatedly describing its chip sales and technology licensing as separate businesses, when in fact Qualcomm bundled them to stifle competition.

In January 2017, the Federal Trade Commission and Apple (NASDAQ:AAPL) sued Qualcomm separately in connection with its alleged efforts to monopolize the market for baseband processors, a type of chip used in cellphones.

Apple said Qualcomm used its monopoly position to overcharge for chips, and seek onerous and costly terms for technology licenses.

Qualcomm called the claims baseless, but its share price fell 13% on the first full trading day after Apple sued.

The case is In re Qualcomm Inc Securities Litigation, U.S. District Court, Southern District of California, No. 17-00121.

Qualcomm reaches $75 million settlement over sales and licensing practices
 

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Comments (1)
Derick Lim
Derick Lim Jun 18, 2024 6:33PM ET
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$75 million settlement to deceptively rally stocks......what a bargain.........
 
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