Us authorities are investigating against Microsoft in connection with possible bribes and corruption in the supply of software to Hungary.
The U.S. officials have the authority to investigate payments to governments and officials in other countries, American firms in accordance with the Law on combating corruption abroad 1977 (FCPA). The law prohibits bribery and allows you to prosecute for corruption, wherever it occurs, reports citing informed sources The Wall Street Journal.
American authorities believe that Microsoft sold its applications, such as Word and Excel, to intermediaries in Hungary with huge discounts. These partners of the Corporation then supplied to state organizations in 2013 and 2014 at prices close to the official ones. Part of this difference was then paid to government officials.
A Microsoft spokesperson said that in 2014 it became aware of ” possible violations ” in the work of the Hungarian subsidiary, and that the company quickly conducted an internal investigation. “We fired four employees and stopped our business with four partners, and we are protecting ourselves from legal claims that they later filed,” the representative said.
The publication reports that among the dismissed was Istvan Papp, account Manager at Microsoft Hungary. Papp told the publication that he “received only positive feedback from management” and declined to comment further.
A Microsoft spokesperson said that in 2014, the company revised how it handles discounts, and discloses more information about them to government customers. “This requires partners to transfer discounts to these customers and guarantees official confirmation from the customer that they know about the discount,” the company said. The firm also stated that it provides for compliance in contracts with both U.S. and local law, and it has added AI-based technology to help identify compliance risks.
In recent years, Microsoft has faced sales challenges in several countries. In 2013, US authorities investigated corruption deals in China , Italy and Romania, as well as in Pakistan and Russia for bribery. It is not yet clear whether any of these investigations are ongoing.
In 2012, President Donald Trump told CNBC that “this country is absolutely crazy” to pursue bribery in other countries; that he puts American firms at a disadvantage; and that the law is “terrible” and needs to be changed. The Trump organization, its commercial company that manages the Trump name licensing and property management, is allegedly engaged in a practice that could negatively impact the FCPA.
Meanwhile, in April 2017, attorney General Jeff Sessions stressed that the U.S. Department of justice will continue to actively enforce FCPA and other anti-corruption laws . The largest investigation in the framework of FPCA was launched in September 2017 in connection with the payments of 965 million dollars to the Swedish telecommunications company Telia and its subsidiary in Uzbekistan to officials of this country.