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Microsoft Investigated for Alleged Bribery in Hungary

2018-09-27 17:56 Thursday

American Internet giant Microsoft has been hit by an anti-corruption probe over alleged behavior in Hungary four years ago.


On August 23rd, the Wall Street Journal reported that the Department of Justice and the Securities and Exchange Commission (SEC) are investigating the case. Microsoft is believed to have sold software at a substantial discount to Hungarian middlemen in 2013 and 2014, who in turn sold it to the Hungarian government at the original price.

Since 2010, Microsoft has been aggressively expanding its presence in emerging markets and middle-income countries such as Hungary, but this strategy has also raised legal and compliance issues for Microsoft.

In a statement responding to the allegations, Microsoft said that it was cooperating with the investigation, and had launched an internal investigation soon after learning of the matter in 2014. Furthermore, Microsoft said it would abide by business ethics and would not compromise on combating corruption.

Microsoft has already fired four employees, including its former-country manager for Hungary Istvan Papp, in connection to the scandal. In addition, Microsoft terminated its partnership with several Hungarian middlemen last year for breaching Microsoft's compliance policies.

Over the next two years,Microsoft is expected to sell about $30 million in products to businesses in Hungary with potential discounts of up to 30%. Whether future deals will come under scrutiny remains unclear.

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