Microsoft caught up in bribery probe over software sales in Hungary

Microsoft Logo at Ignite
Microsoft Logo at Ignite (Image credit: Windows Central)

Microsoft is being investigated by the U.S. Department of Justice and Securities and Exchange Commission over potential bribery and corruption in its handling of software sales to the Hungarian government, The Wall Street Journal reports.

According to the report, U.S. authorities are probing potential wrongdoing in a scheme through which Microsoft allegedly sold software to "middleman firms" at large discounts. The firms involved would then sell the software to the Hungarian government at their full prices, allegedly using the difference to bribe government officials.

In a statement to The Wall Street Journal, Microsoft's deputy general counsel, David Howard, said that the company quickly engaged in its own investigation after finding out about "potential wrongdoing." The company says that it fired four of its employees in Hungary as a result of its own probe. It also ended relationships with four partner companies in the country last year. "We're committed to ethical business practices and won't compromise these standards," Howard told The Wall Street Journal.

This investigation follows similar probes Microsoft has faced in recent years over its software sales practices in other countries. In 2013, the company was investigated over potential bribery schemes in China, Romania, Italy, Russia, and Pakistan. It's unclear if Microsoft is still under investigation over dealings in those countries.

Microsoft told The Wall Street Journal that it is cooperating with investigators and it has moved to improve transparency around its discounting practices.

Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl

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  • The question is why Hungarian government didn't buy MS products directly from Microsoft?
  • When it comes to MS enterprise licensing u have to buy from a volume licensing dealer. u have the agreement with MS but there is always a reseller.
  • And who got kickbacks from the middlemen?
  • See everyone, Microsoft is no better than google. They are ALL the same.
  • did you even read the article. the reseller is the one at fault.
  • Ok, so how is Microsoft caught up if they are not at fault. non story if this is the case....
  • The middle man firm is the at issue here. Are they US firms? Do they kick back to MS? MS can sell its software at any discount they want, that is not illegal.
  • Old story. If you care about details from end of 2017:
    So the middle men are Humansoft Kft., RacioNet Zrt. and Euro One Zrt.
    Parties involved in the bribery are many: