Microsoft Hungary to pay $8.7 million to resolve foreign bribery case

Hungary subsidiary of Microsoft Corporation has agreed to pay $8.7 million in Criminal Penalties to resolve foreign bribery case, the United States Justice Department announced on Twitter on Monday.

Hungary Subsidiary of Microsoft Corporation Agrees to Pay $8.7 Million in Criminal Penalties to Resolve Foreign Bribery Case https://t.co/BJRoEO7UFT

— Justice Department (@TheJusticeDept) July 22, 2019

Microsoft Magyarország Számítástechnikai Szolgáltató és Kereskedelmi Kft. (Microsoft Hungary), a wholly-owned subsidiary of Microsoft Corporation, has agreed to pay a criminal penalty of more than $8.7 million to resolve the US government's 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.

Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division, U.S. Attorney Geoffrey S. Berman of the Southern District of New York and Assistant Director Robert Johnson of the FBI's Criminal Investigative Division made the announcement.

The announcement further added that 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. 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. 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" and stored in various tools and databases on Microsoft servers in the United States in violation of the Foreign Corrupt Practices Act.