US Probes Microsoft for Bribery in Hungary: Workers Fired

The U.S. Justice Department and the Securities and Exchange Commission are probing Microsoft for possible bribery and corruption in Hungary over software sales and the company quickly said it had fired four workers and was co-operating.

The Wall Street Journal reported on the investigation which noted that the US has jurisdiction to look into payments to governments and officials in other countries by U.S. firms under the  Foreign Corrupt Practices Act (FCPA) which bars bribery and allows prosecution for corruption.

A Microsoft spokesperson told Fortune it became aware in 2014 of “potential wrongdoing” in its Hungarian subsidiary and acted swiftly, firing workers and ending business with four partners and defending itself against legal claims after doing so.

The Journal reported among those let go was Istvan Papp, Microsoft’s Country Manager for Hungary. He told the paper he had “received only positive feedback from the management,” and declined further comment.

The alleged scheme said to be uncovered was that the company would sell software to companies at a discount, which was then marked up and sold at full price to the government, with kickbacks to government officials.

The company said it made changes in practices in 2014 in discounts and discloses them to government clients. “This requires partners to pass on discounts to these customers and ensures a formal confirmation from the customer that they are aware of the discount,” the company said. The firm said it requires compliance in contracts for US and local laws and has added AI-based technology to help identify compliance risks.

Microsoft has had similar problems in other countries including China, Italy, Pakistan, Russia and Romania, including over bribery.

Now US President Donald Trump said in 2012 he condoned bribery in foreign countries by US corporations so that they could be competitive there and it would be “absolutely crazy” to prosecute them.