Slashdot Mirror

← Back to Stories (view on slashdot.org)

Justice Department Joins Fraud Lawsuit Against Oracle

Posted by Soulskill on from the just-tell-them-it-was-for-national-security dept.

suraj.sun writes with news that the US Department of Justice has joined a lawsuit alleging Oracle of overcharging the federal government for its software products. Quoting: "In a nutshell, the lawsuit argues that Oracle's government customers — a wide array of agencies, including the State Department, the Energy Department, and the Justice Department itself — got deals 'far inferior' to those the enterprise software giant gave to its commercial clients. The allegations stem from a software deal between Oracle and the federal General Services Administration that the Justice Department says involved 'hundreds of millions of dollars in sales' and that ran from 1998 to 2006. Under the contract, Oracle was required to inform the GSA when commercial discounts improved and to offer those same discounts to government buyers. Oracle misrepresented its true commercial sales practices and thus defrauded the US, the lawsuit contends.

9 of 100 comments (clear)

  1. Glad I don't use Oracle! by Anonymous Coward · · Score: 3, Funny

    It's crap like this that really makes me glad I stick with more reputable vendors like Sun.

  2. Re:The first rule on playing against the house... by Monkeedude1212 · · Score: 3, Insightful

    Problem is - who is the house?

    Most people would say the government, and then other people tote in and say the government is run by corporations.

  3. It may be a bit ambiguous.... by mark-t · · Score: 2, Funny

    ... what "most favored customers" actually means.

    Looking at things from a purely capitalistic perspective...

    If they are charging less for a particular customer, then they are making less money on the sale, so the client probably *ISN'T* their most favorite customer - in fact, their favorite customers would probably be the ones that they could most easily *OVER*charge money to, rather than those they charge the least to.

    The contract _should_ have said an equal or lower price than *ANY* of their customers. If it actually used the word "favored" then I think Oracle might be in the clear... legally, if not ethically.

    --
    File under 'M' for 'Manic ranting'
    1. Re:It may be a bit ambiguous.... by Anonymous Coward · · Score: 2, Interesting

      "most favored" != "favorite"
      The generally accepted meaning of someone being "most favored" is that they are receiving the most favorable terms available.

    2. Re:It may be a bit ambiguous.... by rolfwind · · Score: 3, Insightful

      The legal system, just like any profession, has it's own definitions and most-favored customer is one of them. If they didn't have accepted definitions, most contracts suits would go nowhere because the meaning of anything could be debated (ie depends on the meaning of the word "is" is)

      http://www.businessdictionary.com/tips/22/the-most-favored-customer-clause.html

  4. Re:I don't understand by BradleyUffner · · Score: 2, Informative

    I don't understand. Under what basis can they bring a lawsuit? It is not illegal to treat the federal government the same as all your other customers!

    Oracle had a contract to sell software to the government.
    The contract said Oracle had to report to the government the discount prices they charged other companies.
    Oracle agreed to, and signed this contract.
    Oracle lied to the government when it reported these prices.
    Oracle broke their contract.

  5. Re:Way to go government! by Aladrin · · Score: 2, Informative

    Actually, if you finish reading the summary, they signed a good deal after all. The contract said that Oracle must inform them of the other deals, and Oracle lied to them. Oracle breached the contract. -That- is why they are being sued.

    --
    "If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
  6. Re:Gov looking to save money? by edmudama · · Score: 5, Informative

    This isn't about the government paying more than a private entity.

    This is about the government having a contract with oracle guaranteeing a price match with other parties for the duration of the contract, which oracle tried to get around by using obscure pricing practices with new private entity business. Oracle agreed to match the prices, and then lied about what they were charging. That's fraud.

    --
    More data, damnit!
  7. Re:The government can pay more by KarmaMB84 · · Score: 4, Insightful

    Until you sign a contract that says it's not true.