Business

Microsoft tied to probe

Partnerships are focus of bribery investigation

REDMOND – Microsoft is entangled in a U.S. government investigation into whether the software maker and some of its business partners resorted to bribery to close deals in China, Romania and Italy, according to a report published Tuesday.

Citing anonymous people familiar with the matter, the Wall Street Journal said the Justice Department and the Securities and Exchange Commission are examining whether kickbacks were paid to foreign officials to help close sale of software. The probe’s targets include resellers of Microsoft software, company consultants and Microsoft’s own employees outside the U.S., according to the Journal.

The newspaper emphasized that the inquiry remains in an early stage and there have been no accusations of wrongdoing.

In a blog post, Microsoft lawyer John Frank said the issues raised in the Journal’s story are important enough to merit a review by the Redmond, Wash., company and the federal government.

“We take all allegations brought to our attention seriously, and we cooperate fully in any government inquiries,” wrote Frank, Microsoft’s deputy general counsel. “Like other large companies with operations around the world, we sometimes receive allegations about potential misconduct by employees or business partners, and we investigate them fully, regardless of the source.”

Both the Justice Department and the SEC declined to comment.

The reported investigation poses another potential legal headache for Microsoft, which has been sparring with government regulators in the U.S. and Europe for the past two decades.

Most of the regulatory battles have been over whether Microsoft abused its position as the leading maker of personal computer software to thwart competition. Microsoft suffered its latest setback in that regulatory arena earlier this month when European regulators fined the company $733 million. Microsoft violated an agreement to provide users of PCs running on its Windows operating system with an alternative to its Internet Explorer Web browser.

The investigation cited by the Journal revolves around the Foreign Corrupt Practices Act, a 36-year-old law that forbids U.S. companies from bribing foreign officials to close deals.



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