MANHASSET, N.Y. — Qualcomm Inc. has reached an agreement with the U.S. Dept. of Justice (DOJ) resolving "gun-jumping" allegations arising from its acquisition of Flarion Technologies Inc. earlier this year.
Qualcomm (San Diego), agreed last August to pay $600 million to acquire Flarion (Bedminster, N.J.), which developed a technology called Flash-OFDM, for use with mobile broadband Internet protocol services. The acquisition was cleared by the DOJ's Antitrust Division and closed in mid-January.
During the Hart-Scott-Rodino review of the transaction, Qualcomm 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. Both companies 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, violating 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.
"With the successful integration of Flarion well under way, we decided to put this matter behind us to avoid diverting or distracting the Qualcomm-Flarion team from the important tasks of integrating the best of
both companies' technologies and refining our joint roadmap," said Louis Lupin, senior vice president and general counsel for Qualcomm, in a statement.
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