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Philips Faces French Criminal Probe Over Sleep Apnea Device Recall

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Paris prosecutors have opened a criminal investigation into Philips (PHG.AS) over its 2021 recall of sleep apnea machines, examining potential charges of aggravated fraud and failure to report safety risks that could lead to death.

The recall affected 15 million devices worldwide, including 350,000 in France, after it was discovered that polyurethane foam inside the machines could degrade, releasing particles or gases linked to headaches, respiratory issues, and even cancer risks.

The Paris Public Health division confirmed receiving 104 individual complaints tied to the devices. The probe was formally launched on June 12 after a preliminary inquiry by France’s OCLAESP (Central Office for the Fight against Environmental and Public Health Damage).

Philips stressed that this is not a new investigation, but part of ongoing proceedings initiated in 2023 concerning the lead-up to the recall. The company said the case does not concern products currently sold in France and pledged to cooperate with judicial authorities.

Under French law, aggravated fraud endangering human health carries penalties of up to seven years in prison and €750,000 in fines for individuals, and up to €3.75 million for corporations.

The case adds to Philips’ global legal woes. In 2023, the company agreed to a $1.1 billion settlement in the U.S. related to the same recall. Shares fell nearly 5% in early trading Monday before trimming losses to -1% by 1400 GMT following confirmation of the French probe.

Philips Sells Xiver Chipmaking Subsidiary, Report Reveals

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Philips, the global healthcare technology company, has sold its small chipmaking subsidiary, Xiver, according to a report by the Telegraaf newspaper, citing the company’s CEO. The subsidiary was acquired by a consortium led by Orange Mills Ventures, the investment firm of Dutch businessman Cees Meeuwis. The financial details of the transaction were not disclosed.

Xiver, which specializes in manufacturing micro-electromechanical systems (MEMS)—a combination of mechanical and electronic components on a silicon chip—had been struggling financially and was described as a loss-making business. The subsidiary employed around 100 people. CEO John van Soerland, who retired from VDL last year, confirmed that Xiver supplies to major industry players, including ASML and the French defense firm Lynred.

Philips, which sold most of its semiconductor-related businesses, including ASML, several years ago, has since focused its efforts primarily on the healthcare sector. Xiver’s sale marks another step in the company’s strategy to streamline its operations, continuing its shift away from semiconductor manufacturing. Philips’ former semiconductor businesses, which include NXP and Nexperia, have now been spun off into separate entities.