Philips Wins Dutch Court Battle Over 15 Million Device Recall

Philips won its court case following the recall of 15 million devices

A Dutch court has ruled against investors who had demanded an investigation into the actions of Philips’ management following the recall of millions of sleep apnoea treatment devices. Shareholders accused the company of reacting too late to the threat to patients’ health and of failing to provide investors with timely information about the risks.

Photo: Reuters

Add Logos Press as a preferred source on Google

The Commercial Division of the Amsterdam Court of Appeal examined Philips’ internal documents and concluded that there were insufficient grounds for an investigation. The court noted that reliable data on the potential danger posed by the sound-absorbing foam used in the devices only emerged in the early months of 2021. The court found no evidence that the company’s management had received this information late.

According to Reuters, the proceedings were initiated by the Dutch investors’ association VEB and a group of private and institutional shareholders. They claimed that Philips’ internal controls had failed to identify the problem in time, that management should have intervened earlier in the operations of its US subsidiary Respironics, and that the supervisory board had failed to exercise proper oversight. The investors also believed that the company had breached disclosure rules and misled the market.

The court’s ruling relates solely to the question of whether an investigation is necessary. It does not establish whether errors were made in the manufacture of the devices, nor does it determine whether investors are entitled to compensation.

In 2021, Philips recalled around 15 million devices worldwide for the treatment of sleep apnoea and other respiratory devices. The reason was PE-PUR foam, which could degrade and release potentially harmful substances. The recall resulted in a serious crisis for the company: its shares lost around two-thirds of their value.

In 2024, Philips agreed to pay $1.1 billion to settle health-related claims linked to these devices in the US. Legal proceedings are, however, ongoing in several countries. In France, prosecutors are investigating allegations of aggravated fraud and the concealment of safety risks.

This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.

How did this story make you feel?