Microsoft being investigated for bribery deals in Hungary: report

Microsoft being investigated for bribery deals in Hungary: report
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Microsoft is being investigated by federal authorities over bribery and corruption allegations pertaining to its software sales in Hungary, The Wall Street Journal reported Thursday.

The Department of Justice (DOJ) and Securities and Exchange Commission (SEC) are reportedly leading the probe, following a series of previous investigations into Microsoft’s business dealings in 2013 with partners in five other countries.


The investigation also comes amid a push made by Microsoft earlier this decade to break into emerging markets, as well as those in smaller and middle-income countries. The initiative, the Journal reports, has led to some legal challenges. 

Now, the DOJ and SEC are exploring how Microsoft sold software like Word and Excel to middleman firms in Hungary, which then sold them to government agencies in the country between 2013 and 2014.

U.S. investigators are reportedly examining whether those middlemen used steep discounts they received on Microsoft's software to offer bribes and offer kickbacks to government officials.

Microsoft’s deputy general counsel David Howard told the Journal that Microsoft has been investigating itself after the company became aware of the “potential wrongdoing” in its Hungarian operations in 2014.

“We’re committed to ethical business practices and won’t compromise these standards,” Howard said in a statement.

The company has reportedly fired four employees as a result of its investigation in Hungary, including its country manager, Istvan Papp. Microsoft also said it ended several of its business partnerships in Hungary last year that the company found to be in violation of its policies.

Microsoft has faced scrutiny in its foreign business dealings before.

The SEC has examined Microsoft deals in the Czech Republic and Romania, where Microsoft’s former country manager Călin Tatomir is slated for trial next month. Tatomir is faces charges of money laundering and being complicit in the abuse of public office while serving as the company's country manager in Romania, the Journal reported.