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Microsoft Hit With US Bribery Probe Over Deals in Hungary (wsj.com)

Posted by msmash on from the growth-at-any-cost dept.

Microsoft is being investigated by U.S. authorities over potential bribery and corruption related to software sales in Hungary, WSJ reported Thursday. From a report: The investigation follows a series of similar probes into Microsoft business partners that surfaced in 2013 in five other countries. Microsoft made a push earlier this decade to expand in emerging markets, as well as smaller, middle-income countries like Hungary. In some cases, those bets have turned into legal and reputational challenges. The U.S. Justice Department and the Securities and Exchange Commission are probing how Microsoft sold software such as Word and Excel to middleman firms in Hungary that then sold those products to government agencies there in 2013 and 2014, according to these people. Microsoft sold some of its products to these intermediaries at steep discounts, and then these firms sold the products to the Hungarian government at closer to full price, these people said.

52 comments

  1. boiler for sale by Anonymous Coward · · Score: 0

    bojler elado

  2. these people just discovered wholesale by Anonymous Coward · · Score: 0

    according to these people. Microsoft sold some of its products to these intermediaries at steep discounts, and then these firms sold the products to the Hungarian government at closer to full price, these people said.

    you don't say... I would've thought middlemen would pay the same and make 0 profits....

    1. Re:these people just discovered wholesale by Anonymous Coward · · Score: 0

      yeah it seems that massive discount was about 30%. Sounds like normal wholesale prices to distributers. I am guessing those writing the story don't have enough information on what actually happened so are grabbing whatever straw of information they can no matter how ridiculous.

    2. Re:these people just discovered wholesale by szabo.m.peter · · Score: 5, Informative

      The government is a big enough buyer to by from MS directly, there is no need for middle-men.

      This was about corruption, rather than usual business business. It seems the corruption scheme was organized by high ranking government officials (who probably purchased much more licences than needed), and the middle-men where paying kickbacks to these officials.

      It seems MS Hungary leadership also knew about the sales being a fraud, as the (at the time) CEO of MS Hungary was quickly fired by the mother company. After leaving MS Hungary, he got a high ranking job in the Ministry that organized the license purchases...

    3. Re:these people just discovered wholesale by bloodhawk · · Score: 1

      MS don't sell direct in almost any country. They use a partner/distributor model so nothing strange about going via a 3rd party company or for that company to be receiving discounts. The question is was their something extra shady happening.

    4. Re:these people just discovered wholesale by Anonymous Coward · · Score: 0

      middle-men where paying kickbacks to these officials.

      That is of course a completely different story from the submission's strange presentation. Since the article is pay-walled, we can't check if that too is nonsensical.

    5. Re:these people just discovered wholesale by Anonymous Coward · · Score: 0

      It is a minor case in comparison with gas purchases of the country where a middleman is inserted between seller and government buyer. Hungary is also prominent of hijacking european structural funds to build an empire for Orban.

  3. 'This is Not Your Father's Microsoft' by Gravis+Zero · · Score: 4, Informative

    Hmm... sure seems like they haven't changed.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:'This is Not Your Father's Microsoft' by Anonymous Coward · · Score: 1

      This is small potatoes versus the defense contracting industry. That's where the big boys play the real game of graft.

    2. Re:'This is Not Your Father's Microsoft' by Megol · · Score: 1

      So MS of old is associated with bribes and corruption in your mind? Of all the shit they've done during the years I can't remember one instance of corruption pissing me off. Abuse of their (near) monopoly? Several cases. Spreading FUD and lies about competition? Of course. Patenting obvious stuff? Natürlich.
      This is different to what have made me angry about Intel in the past, there company approved "payoffs" to ensure their market dominance have been more of a general trend.

      With the limited information available I'm not even sure MS is more that peripherally involved, yes it's about MS products and MS employees however did MS approve or even profit from this?
      My understanding is that MS Hungary sold discounted software to Hungarian companies that in turn sold it to the government earning a good profit in the process, but how is MS as a company gaining from such an arrangement? MS employees and government persons getting bribes sure, but how does MS itself earn more than by simply making a deal with the government itself? IMO as told so far it doesn't add up.

    3. Re:'This is Not Your Father's Microsoft' by Rob+Y. · · Score: 1

      None of it pissed you off? How about the corruption of the standards process that got Office XML declared a standard alongside a truly open one that was on the verge of being adopted in Europe. And then the subsequent 'support' of non-compliant versions of both Microsoft's own standard and the competing one, so that only Office could support documents produced in Office in either format.

      If that didn't piss you off, then you don't care about the issues involved - or are such a Microsoft supporter that you do care - in the sense that your guys won.

      --
      Posted from my Android phone. Oh, I can change this? There, that's better...
    4. Re:'This is Not Your Father's Microsoft' by Gravis+Zero · · Score: 1

      So MS of old is associated with bribes and corruption in your mind?

      Absolutely. Corruption, anticompetitive behavior and shitty code are all MS has ever been good at.

      --
      Anons need not reply. Questions end with a question mark.
  4. Why action for bribes in other countries? by SuperKendall · · Score: 3, Informative

    The fact of the matter is, there are some places on earth where any business of any size is not going to be done without bribes.

    Why punish Microsoft for doing what every other company does in Hungary?

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Why action for bribes in other countries? by Nutria · · Score: 2

      The Foreign Corrupt Practices Act of 1977.

      I've never been able to understand why it's our business to prosecute someone else's criminals. Let Hungary prosecute them!!

      --
      "I don't know, therefore Aliens" Wafflebox1
    2. Re:Why action for bribes in other countries? by Anonymous Coward · · Score: 0

      Uh, because rule of law is a good thing even internationally? Seriously you don't have to understand, that's ok. Derp.

    3. Re:Why action for bribes in other countries? by PPH · · Score: 2

      The key word here is Foreign. Slipping a few bucks to domestic politicians is protected speech. This wasn't passed to prosecute criminal activities overseas. It was passed to keep all the political contribution money here at home.

      --
      Have gnu, will travel.
    4. Re:Why action for bribes in other countries? by rtb61 · · Score: 2

      'ER' for the same reason you prosecute people for rape and murder even though other people rape and murder. The idea is to prosecute everyone who commits that crime, rehabilitate them if possible, if not lock them up for the rest for the rest of their lives. For corporations, you must eventually fold them up, if they continue to repeat the same corrupt practices. In the case of M$ take it's source code for all of it's products and make them public domain free to access by all other corporations.

      --
      Chaos - everything, everywhere, everywhen
    5. Re:Why action for bribes in other countries? by SuperKendall · · Score: 1

      Rehabilitate who though? That is the giant flaw in your argument; you cannot do business in some places without bribes, that is simply how the real world is.

      The most meaningless and harmful laws are those that straight-up ignore how things work in reality, and punish the victims. The "war on drug (users)" is one. A law where you punish corporations for following local custom in business completely outside the US, is another.

      There is no rehabilitation. Only punishment, without true purpose or meaning or use. MAYBE it will stop some other companies from doing business in Hungary but how is that helping anyone?

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
    6. Re:Why action for bribes in other countries? by GrimSavant · · Score: 2

      The Foreign Corrupt Practices Act of 1977.

      I've never been able to understand why it's our business to prosecute someone else's criminals. Let Hungary prosecute them!!

      Because the criminals are often the ones running their government, particularly with these sorts of crimes.

    7. Re:Why action for bribes in other countries? by Anonymous Coward · · Score: 0

      Really, a company with a monopoly can't do business without bribes?
      What, you think if Microsoft paid no bribes, Hungary would full-out switch to Linux?
      Sure, they could run pirated Windows instead, but that would be risky unless the courts run on a "whoever pays most" system. But maybe in that case, just not doing business there might just not be the worst solution (plus, there might be international solutions like WTO, violations of the Berne convention etc. for that if you really wanted to go into that).

    8. Re:Why action for bribes in other countries? by Anonymous Coward · · Score: 0

      Your whataboutism is well-done, komrade!!!

    9. Re:Why action for bribes in other countries? by Anonymous Coward · · Score: 0

      But it is criminal to slip porn stars money?

    10. Re:Why action for bribes in other countries? by PPH · · Score: 1

      Personally, I hope not.

      --
      Have gnu, will travel.
    11. Re:Why action for bribes in other countries? by PPH · · Score: 1

      rule of law is a good thing

      Who's law? What is illegal in this country* may be SOP in other countries.

      *And that doesn't mean is doesn't go on here. It just gets driven underground. Or managed to ensure 'compliance' while still slipping the politicians their cash. And having it go on in the shadows may be fa more ethically damaging than just making payoffs out in the open.

      --
      Have gnu, will travel.
  5. Internal checks by Anonymous Coward · · Score: 0

    The funny thing is that IF anyone goes to jail it will be some poor consultant or TAM. There are tons of training and audit oversight on all interactions, so this had to be a country manager or higher that set it up and agreed to the payoff (not just authorize or be aware of it).

    1. Re:Internal checks by Anonymous Coward · · Score: 0

      TAM's don't sell software. They sell support. Besides, if you're buying their enterprise software, you're not buying it from Microsoft directly.

  6. Whereas here in Germany... by Anonymous Coward · · Score: 0

    the gears are kept oiled and running smoothly.

  7. Total Cost of Ownership by Anonymous Coward · · Score: 1

    I wonder if Microsoft includes this in the brochure?

  8. Hungary? I thought that dried up with CCCP! by Anonymous Coward · · Score: 0

    Still a thing, huh! T54 tanks in the streets is what I remember. And the typical bloc SHITHOLE!

  9. Uh, because intervention works so well? by SuperKendall · · Score: 2

    Uh, because rule of law is a good thing even internationally?

    Well I guess 'Merica should just go in and NUKE THOSE GODLESS HUNGARIANS.

    Rule of law is great but you can't enforce it everywhere, so why try for places that do not even want or accept a strong rule of law? All you will do by making American companies non-competitive there is even further weaken the rule of law abroad. Let large companies get a foothold in and they will slowly improve things.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Uh, because intervention works so well? by Anonymous Coward · · Score: 1

      Rule of law is great but you can't enforce it everywhere,

      But it can be enforced against a company incorporated in the US who breaks the law overseas. You honestly aren't dumb enough to think a US company can't be held accountable for breaking the law outside the country are you?

      Do you also think a US citizen can go to Thailand for underage hookers and not be prosecuted back home?

    2. Re:Uh, because intervention works so well? by Gabest · · Score: 1

      But are they a US company? They pay their taxes elsewhere, their shares are held by international firms and persons.

    3. Re:Uh, because intervention works so well? by Anonymous Coward · · Score: 0

      Yes. Microsoft is a company incoporated in the US.

  10. SUPERFAG KENDALL WITH MORE EXCUSES FOR LAWLESSNESS by Anonymous Coward · · Score: 0

    Is there ANY issue Superfaggot Kendall isn't willing to bend over and shove his anus onto as if it were a cock and he were Trump Junior spending his life in Federal Prison? STOP APOLOGIZING FOR CRIMINALS FAGGOT KENDALL.

    What a ridiculous hypocritical sack of backwater red state pig shit this apologist clown is lol. Hang this bitch! Find his Louisiana INCEL chapter and END THIS BITCH!

  11. Kendall immediately with the "nuke" shit argument by Anonymous Coward · · Score: 0

    Kendall are you this stupid or has Trump cut off blood flow to anything but your amygdala? No, we don't have to nuke anyone to get what we want you fucking idiot. We have the world's most weaponized economic system!

    NUCLEAR WAR OBVIOUSLY ISN'T THE ONLY WAY TO GET OTHER COUNTRIES TO RESPECT OUR LAWS, DIPSHIT KENDALL.

    God damn you're a disingenuous dumbass... "NUKE THEM!" - Seriously I'd ask if you were high but sucking Putin's dick doesn't get you high, so I don't know what would explain your glazed mental flatulence. Get a job.
    Find something to read, educate and un-retard yourself while Trump heads off to the pokey, Jesus...

  12. How to deal with corrupted countries by manu0601 · · Score: 2

    It is nice to see US also goes after US companies for foreign corruption cases.

    However, to defend Microsoft (I never thought I would do that one day), how were they supposed to deal with countries where you have to bribe in order to do business?

    1. Re:How to deal with corrupted countries by Anonymous Coward · · Score: 0

      I can see your point. On the other hand Microsoft has a long history of bribing other countries to screw over anyone else trying to do business. I think they've messed with Karma enough to take a bullet on this one.

    2. Re:How to deal with corrupted countries by theCoder · · Score: 2

      How to deal with it? Simple - don't. I know it's hard for the business world where bribery, er "treating the customer well" with lavish gifts, dinners, drinks, vacations, etc, is somehow considered normal, but that should stop. Yes, it's nice to be on the receiving end of that, but it raises the costs for everyone.

      For a company like Microsoft, which is a virtual monopoly, it's completely unnecessary. What is the Hungry government going to do, not buy Word and Excel licenses? I could understand the question if this were some small company trying to break into the market, but Microsoft?

      Worst case, you don't go into that market. If bribes are required, don't go. Bribing your way in will just increase the cost of your product for everyone. And if your product is really that good, then the country that "requires" bribes will miss out and either change its ways or do without. If it really bugs you, document as best as possible the bribery of your competitors. If they are US based (or owned by a US company), turn them in for violations of FCPA. Or just explain the bribery to any shareholder/investor/reporter that asks about it. No one (at least in the US) is going to really say that the company should have resorted to bribery.

      So no, there are no places where you "have" to bribe. There are alternatives -- they are just harder (and don't enrich your friends or relatives with company cash).

      --
      "Save the whales, feed the hungry, free the mallocs" -- author unknown
    3. Re:How to deal with corrupted countries by Anonymous Coward · · Score: 0

      Are you saying that if Microsoft didn't come across with the baksheesh, the Hungarian government would use a different office suite? Or would just pirate Office?

  13. similarily in Romania by Anonymous Coward · · Score: 0

    https://en.wikipedia.org/wiki/Microsoft_licensing_corruption_scandal

  14. Re:The Mystery of Lawlessness is already working by Anonymous Coward · · Score: 0

    For this reason, God sends them a powerful delusion, so that they will believe the lie.

    Energeian Planes!

  15. Microsoft bribery/stock referrals by najajomo · · Score: 2

    Oct 1991: "Use MS stock as an incentive for recommendation/referral program. Each referral purchase is rewarded with share/fraction of share. Use direct mail to get the message out."

  16. They're still at it. by Anonymous Coward · · Score: 0

    Proof that microsoft hasn't changed since the 90s. Still the asshole slithery company it has always been.

  17. KENDALL IS A MORON LOL by Anonymous Coward · · Score: 0

    Apologist faggot Kendall would suck any dick to accomplish his Trump-given mission - even Putin's.