Qualcomm shareholders have succeeded in achieving what Apple and government regulators around the world tried but failed to do: make Qualcomm pay for its aggressive licensing practices.
Qualcomm said in a court filing Tuesday that it will agree to pay $75 million to settle a lawsuit brought by shareholders who claimed the company misled them about how its business practices worked and artificially inflated its stock price. Reuters earlier reported the settlement.
Shareholders have raised questions about Qualcomm’s failure to fully disclose how it handles patent licensing. At the time, the company refused to license standard-essential patents to some rivals and in some cases made the purchase of its chips a requirement for deals.
Qualcomm wins lawsuit, stock price rises, shareholder lawsuits start to look precarious
Apple, the FTC and other regulators sued Qualcomm over the same issue. The lawsuits allege that Qualcomm engaged in unfair business practices by tying essential patent negotiations to requirements that companies also buy its chips.
The result puts the shareholder lawsuits in an interesting position: Qualcomm’s stock price rose as a result, so their argument that Qualcomm’s stock price was artificially inflated looks pretty flimsy. So shareholders saw the settlement as a good outcome – unlike others, they actually got paid.
The terms of the settlement still need to be approved by a judge. Qualcomm did not immediately respond to a request for comment.
