A Dutch court on Saturday, October 10, 2026, dismissed demands by Philips shareholders for an investigation into the company's handling of its 2021 recall of about 15 million sleep apnea devices, ruling that there was no indication Philips knew about the problems long before it issued a warning, in a significant win for the Dutch health technology group, whose shares lost about two-thirds of their value after the recall.
The Enterprise Chamber of the Amsterdam Court of Appeal heard the case, brought by the Dutch investors' association VEB and a large group of retail and institutional investors. They argued that Philips' internal controls failed to identify and address problems with the devices promptly, that executives reacted too late and that the company failed to inform investors adequately. Philips recalled the machines after finding that the foam in them could release harmful substances and might pose health risks.
The court said it found no sufficient grounds to question Philips' policies or management practices that would justify an inquiry. It found that reliable research data pointing to potential health risks from the PE-PUR sound-abatement foam became available only in the first months of 2021 and that there was no evidence the executive and supervisory boards received reliable information about those risks too late. It also saw no reason to assume Philips should have intervened earlier at Respironics, its US subsidiary that made the devices, or that the supervisory board failed in its oversight. Philips' internal systems, the court said, were based on international standards and had been regularly audited and strengthened.
The ruling is narrow. It does not decide whether mistakes were made at Respironics and it does not decide whether investors are entitled to compensation for their losses. It addresses only whether there were grounds to order an investigation into Philips' policies and conduct. Philips denied the shareholders' accusations and said it welcomed the court's decision.
The company's legal troubles are not over. The recall led to probes in several countries and prosecutors in France are still investigating charges of aggravated fraud and failure to report safety risks. In the United States, Philips agreed in 2024 to pay $1.1 billion to settle all personal injury claims related to the devices.
For investors, the decision closes one avenue of attack in the Netherlands, though it does not erase the financial damage of the recall.
