Wednesday, April 12, 2006

QUALCOMM and DOJ Reach Settlement in Flarion Gun-Jumping Case

QUALCOMM reached an agreement with the U.S. Department of Justice (DOJ) resolving "gun-jumping" allegations arising from QUALCOMM's acquisition of Flarion Technologies earlier this year. The acquisition was cleared by the DOJ's Antitrust Division and closed in mid-January.

QUALCOMM said that during the Hart- Scott-Rodino review of the transaction, it and Flarion called the DOJ's attention to provisions of the acquisition agreement that required Flarion, in the period before the closing, to obtain QUALCOMM's consent to enter into certain types of intellectual property licenses and other agreements, and to make certain types of customer proposals. QUALCOMM and Flarion said they voluntarily modified some of the provisions to eliminate or reduce the consent requirement. The DOJ has asserted that the provisions effectively gave QUALCOMM an inappropriate level of control over Flarion's business prior to Hart-Scott- Rodino clearance in violation of the Hart-Scott-Rodino Act. The companies disagree with the DOJ's position. The settlement involves the simultaneous filing of a civil complaint by the DOJ under the Act and the entry of a stipulated final judgment. The judgment contains no finding or admission of wrongdoing by QUALCOMM or Flarion. The companies will pay $1.8 million to the DOJ.

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