Popular Dutch electronics company Philips is best known for its health and wellness technology. From electric toothbrushes to razors, baby bottles, and light alarms, the company sells elite products at a premium.
However, Philips is currently paying its customers instead, as it recently settled an ongoing lawsuit. The company has to pay a whopping $1.1 billion to those who were affected by their malfunctioning sleep apnea machines.
The Philips Recall
In June 2021, Philips announced that it was recalling several breathing and sleep devices sold in the United States as they realized they were extremely dangerous and even lethal to users.
According to Philips, the foam they used to soften the sound produced by the machines was deteriorating and could project small particles and even gases into the users’ airways. They noted that these particles and gases could be toxic, cause headaches, and even carry the risk of cancer.
The Philips Lawsuit Begins
Just two years later, in 2023, the Food and Drug Administration (FDA) had collected 105,000 complaints regarding the recalled breathing devices, including 385 reported deaths.
Apparently, most of the breathing devices and ventilators the company sold between 2008 and 2021 could and did leak the toxic form into people’s airways. So, in December 2023, the FDA encouraged any American who experienced negative side effects with one of Philips’ machines to come forward, join the lawsuit, and get the compensation they deserved.
The Philips Lawsuit, February 2024
At the end of 2023, Philips had already agreed to pay $479 million in restitution to 20 different plaintiffs, as well as repair and replace nearly 5.5 million malfunctioning machines around the world. However, this was far from the end of the story.
Less than a year later, another lawsuit against Philips was well underway. As of February 2024, the FDA had announced that they found a total of 561 victims who died due to the egregious errors within Philips sleep apnea breathing machines.
Philips Was Forced to Stop Selling Sleep Apnea Machines in the United States
While the FDA was fighting Philips in court to ensure affected Americans and their families receive fair compensation, Philips was attempting to save its reputation by fixing any of the sleep apnea machines in question for other customers.
The courts had ruled that the company could no longer sell any new machines within the country, but they had to continue servicing those already purchased. However, Philips then had to recall several of the machines they apparently fixed.
Philips Reached Another Settlement in April 2024
After the seemingly endless saga of lawsuits and recalls, Philips finally settled the matter in April 2024 by agreeing to pay $1.1 billion in restitution to hundreds of plaintiffs.
In addition to the $1.1 billion, plus the $479 million in the last settlement and the more than 15 million breathing devices that were recalled, Philips lost an unbelievable amount of money throughout this complicated process.
Philips Is Thrilled the Lawsuit Is Finally Over
Although they’ve lost billions of dollars, Philips is actually pleased with the outcome; a note from Philips within the settlement said that the payout was “much milder than feared.”
The note also mentioned that Philips is excited that the settlements “mark[s] the end of litigation uncertainty.” Which, of course, is great news for the company for several reasons, including its stock prices.
Philips’ Shares Jumped 33% After the Settlement
According to Forbes, Philips generated $18.7 billion in revenue in 2023; however, its profits for the year were negative $1.7 billion. So, while the company is unquestionably successful, it was a tough year for shareholders.
But just hours after the settlement was announced, Philips’ stock skyrocketed at both the New York Stock Exchange and the Amsterdam Stock Exchange. In Amsterdam, it rose by 33%, and in New York, it increased from $21 to $26.83 essentially overnight.
Some Are Disappointed by the Philips Settlement
For many, the Philips lawsuit settlement may seem like a win-win-win; the affected customers are being compensated, the company can get back to work, and the shareholders are finally making money again.
However, there are some who are disappointed with the outcome, and that’s because after 561 unnecessary deaths and over 100,000 reported illnesses, Philips still claims they did nothing wrong.
Philips Never Admitted Guilt for Its Lethal Sleep Apnea Machines
When a class action lawsuit is settled, there are typically two outcomes, one in which the defendant admits guilt and another, usually with which they pay more money, where they don’t.
In Philips’ case, the company was never forced to admit its guilt in manufacturing and selling sleep apnea machines that killed customers. All they said was, “We do regret the concern that patients may have experienced.”
Philips Maintains That Its Biggest Priority is Customer Safety
Philips has released several statements regarding the lawsuit, but each simply reiterates the company’s dedication to customer safety.
Philips president and CEO Roy Jakobs said, “Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall.”
Check Your Philips Machinery Today
If you or someone you know has a Philips sleep apnea machine, breathing apparatus, or ventilator, please, check the FDA recall website now to ensure your device is not on the list.
If it is, it’s crucial that you contact Philips and have them service the machine before using it again. As we now know, it could save your life.
