The Justice Department and SEC are investigating Microsoft in connection with possible bribery and corruption in the central European country, sources tell The Wall Street Journal.
U.S. officials are investigating Microsoft’s dealings in Hungary in connection with possible corruption, according to a report in The Wall Street Journal citing people familiar with the case.
Authorities are looking into the Redmond company’s software sales in Hungary in 2013 and 2014, and whether middleman companies used bribes and kickbacks to make sales to the government, the Journal reported.
The U.S. Justice Department and Securities and Exchange Commission are investigating under the U.S. Foreign Corrupt Practices Act, sources told the Journal.
A Microsoft spokesman acknowledged the report Thursday, saying that as soon as the company “became aware in 2014 of potential wrongdoing in our Hungarian subsidiary, we moved quickly to pursue a detailed investigation and hold people accountable.”
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Microsoft said it fired four employees in connection with its own investigation and cut business ties with four vendors who sold its technology.
The potential bribery and corruption inquiry involves discounts Microsoft gave on various software products to middleman sellers in the central European country. People cited by the Journal said authorities are investigating if the intermediary vendors then sold the products to the government at much higher rates, and used the extra money for bribes to government officials.
In addition to cutting some ties in Hungary, Microsoft also said it started a new program a few years ago to make sure that any discounts it gave middleman sellers were ultimately passed along to the end government customer. The program requires the customer to confirm that they know about any discounts given to sellers.