14 DAY TRIAL // Software giant Microsoft will pay more than $25 million in order to settle charges in the United States after the company has been accused of being part of a scheme that involved bribing government officials in Hungary.
As part of the settlement, Microsoft will pay $16 million to the US Securities and Exchange Commission without admitting or denying the charges. In addition, it’ll pay a criminal fine of $8.7 million to the Justice Department.
Microsoft has been accused of several wrongdoings in a series of countries, including Hungary, Saudi Arabia, Thailand, and Turkey.
In Hungary, Microsoft’s local subsidiary was accused of violating the Foreign Practices Act by making so-called improper payments, which involve discounts that were then used to bribe government officials.
“From at least 2013 through 2015, Microsoft’s wholly-owned subsidiary in Hungary provided payments intended for foreign government officials in order to obtain business for Microsoft,” the SEC says.
“The payments were made through third party vendors, consultants, distributors and resellers, including in circumstances where there was no evidence of any services provided by the third parties. Improper payments were also funded through excessive discounts that Microsoft’s senior executives in Hungary approved based on vague justifications without ensuring they were passed on to the end government customers.”
Hungarian employees involved in the scheme already fired
In other countries, like Saudi Arabia and Thailand, Microsoft allegedly offered other benefits, like travel and gifts to government officials.
Microsoft President Brad Smith explained in a memo sent to employees that workers of Microsoft Hungary who have been involved in the scheme have already been fired.
“There is no room for compromise when it comes to ethical business practices,” he said.
“At one level, we should all recognize that this misconduct involved a small number of employees at Microsoft Hungary, all of whom are no longer with the company. We're fortunate to have in place today a new set of leaders at our Hungarian subsidiary who are committed to the company's high ethical standards.”