Qualcomm has agreed to a $75 million settlement to resolve a lawsuit brought by shareholders accusing the chipmaker of fraudulent activities related to its sales and licensing practices. The preliminary settlement, filed in the federal court in San Diego, awaits approval by U.S. District Judge Jinsook Ohta, who certified the lawsuit as a class action in March 2023.
The lawsuit, which named Qualcomm and six individual defendants including former CEOs Paul Jacobs and Steven Mollenkopf, claimed that the semiconductor company had misled shareholders by artificially inflating its share price.
Qualcomm has allegedly done this via repeated misrepresentations of its chip sales and technology licensing as separate businesses, while in reality, Qualcomm bundled them to stifle competition.
Qualcomm, based in San Diego, denied any wrongdoing in agreeing to the settlement.
The shareholders’ accusations date back to the period between February 2012 and January 2017. The controversy intensified in January 2017 when both the Federal Trade Commission (FTC) and iPhone maker Apple sued Qualcomm over its market practices.
Apple accused Qualcomm of leveraging its monopoly position to overcharge for chips and impose onerous terms for technology licenses, claims which Qualcomm labeled as baseless. The company’s share price dropped 13 percent following Apple’s lawsuit, Reuters news report said.