/ Apple sued, the FTC sued, but only shareholders got Qualcomm to pay.
By Jacob Kastrenakes, The Verge's executive editor. He has covered tech, policy, and online creators for over a decade.
Qualcomm’s shareholders have managed to achieve something that Apple and government regulators across the globe tried to and failed to do: get Qualcomm to pay up over its aggressive licensing practices.
In a court filing on Tuesday, Qualcomm said it would agree to pay $75 million to settle a lawsuit brought by shareholders, who claim that the company misled them about how its business practices worked and artificially inflated its stock price as a result. The settlement was earlier reported by Reuters.
Shareholders took issue with Qualcomm’s failure to fully disclose how it handled patent licensing. At the time, the company refused to license standard essential patents to certain competitors and in some cases made buying its chips a requirement to get a deal.
Qualcomm won, its stock price rose, and the shareholder lawsuit started looking shaky
Apple, the US Federal Trade Commission, and other regulators sued Qualcomm over that same issue. The lawsuits claimed that Qualcomm was engaged in unfair business practices by tying negotiations for essential patents to requirements that companies buy its chips, too.
Qualcomm largely won those battles, with the Apple lawsuits ending in settlements and regulators’ actions largely being overturned.
The result left the shareholder lawsuit in a funny place: Qualcomm’s stock price rose as a result, so their claim that Qualcomm artificially inflated its share price was left looking pretty shaky. As a result, the shareholders argue that this settlement is a good outcome — they’re actually getting paid, unlike everyone else.
A judge still needs to approve terms of the settlement. Qualcomm didn’t immediately respond to a request for comment.