Netgear Settles Lawsuit on Wi-Fi Speed Claims

Netgear has agreed to settle a class-action lawsuit that accused the company of inflating the data speeds of its Wi-Fi networking devices in advertising materials.

In a November 23 filing with the U.S. Securities and Exchange Commission, Netgear said it has agreed to pay $700,000 to settle a class-action lawsuit initiated in June 2004. A second lawsuit, filed in February, was voluntarily dismissed in favor of the 2004 lawsuit.

Under terms of the settlement, customers who purchased Netgear wireless devices between January 1999 and this month will be eligible for a 15 percent discount on the purchase of a new wireless device. The agreement must be approved by the Santa Clara County Superior Court in California.

Netgear, based in Santa Clara, also agreed to change its advertising for Wi-Fi devices to say that the data speeds advertised are the maximum rate but that "actual throughput will vary" depending on several factors. On Netgear's Website today, advertising for its RangeMax 240 Wireless Router included a statement saying that data speeds of up to 240 mbps may vary.

Netgear will also to donate $25,000 worth of its equipment to charity as part of the settlement, dated November 17.