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Microsoft Hungary fined over USD 8.7 mln in bribery case

The Hungarian unit of software giant Microsoft Corporation has agreed to pay more than USD 8.7 million in criminal penalties to resolve a foreign bribery case, the United States Department of Justice (DOJ) said on Monday, state news wire MTI reported.

The headquarters of Microsoft Hungary (photo: Globetrotter19/Wikimedia Commons)

"Microsoft Hungary... has agreed to pay a criminal penalty of more than USD 8.7 mln to resolve the [U.S. ] governmentʼs investigation into violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bid rigging and bribery scheme in connection with the sale of Microsoft software licenses to Hungarian government agencies," the DOJ said.

Microsoft Hungary admitted that a senior executive and other employees of the unit 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 beginning by at least 2013 and continuing until at least 2015.

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. In reality, the savings were not passed on to the government customers, but instead were used for corrupt purposes and were falsely recorded as "discounts" and stored in various tools and databases on Microsoft servers in the United States, the DOJ said.

Microsoft Hungary entered into a non-prosecution agreement and agreed to pay a criminal penalty of USD 8,751,795 to resolve the matter. The criminal penalty reflects a 25% reduction off the bottom of the applicable fine range for the companyʼs full cooperation and remediation, the DOJ noted.

"Although Microsoft Hungary did not voluntarily self-disclose the misconduct, Microsoft Hungary received credit for its and Microsoft Corporationʼs substantial cooperation with the Department’s investigation and for taking extensive remedial measures," it explained.

In a related matter with the U.S. Securities and Exchange Commission (SEC), Microsoft Corporation agreed to pay to the SEC disgorgement and prejudgment interest totaling approximately USD 16,565,151 for conduct in Hungary, the DOJ added.