Microsoft settles bribery case

Microsoft on Monday agreed to pay more than $25 million to settle a case alleging the software giant violated a federal anti-bribery law, according to the Department of Justice (DOJ).

The company will pay the fees, including an $8.75 million criminal fine imposed on its Microsoft Hungary unit and over $16 million to the Securities and Exchange Commission (SEC), to settle the charges.

Microsoft Hungary, a wholly-owned subsidiary of Microsoft, admitted that it participated in a scheme between 2013 and 2015 to inflate margins on software sales and ultimately use the savings for “corrupt purposes,” according to the DOJ.

“According to Microsoft Hungary’s admissions, beginning by at least 2013 and continuing until at least 2015, a senior executive and other employees of Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel in connection with the sale of Microsoft software licenses to Hungarian government agencies,” the DOJ statement reads.

“In furtherance of that scheme, Microsoft Hungary executives and employees falsely represented to Microsoft that steep discounts were necessary to conclude deals with resellers who bid for the opportunity to sell Microsoft licenses to government customers,” it adds. “In actuality, the savings were not passed on to the government customers, but instead were used for corrupt purposes and were falsely recorded as ‘discounts.’ ”

The savings were stored on Microsoft servers in the U.S., violating the Foreign Corrupt Practices Act, a 1977 law that prohibits U.S. companies from paying bribes to foreign officials to sweeten business deals.