Business Crimes Hotline

Without admitting or denying the SEC's findings, Microsoft consented to a cease-and-desist order and disgorgement and pre-judgment interest of approximately $16.5 million as part of the settlement. Microsoft Hungary will pay a criminal penalty of over $8.5 million and also entered into a three-year non-prosecution agreement with the DOJ.

According to the SEC and DOJ, in Hungary, from at least 2013 to 2015, Microsoft Hungary secured approximately $13.7 million in business as a result of making improper payments to government officials in connection with various licensing transactions and service engagements for Hungarian government agencies. In certain foreign countries, including Hungary, Microsoft does not enter into contracts directly with its end customers, but sells software licenses via distributors or third party resellers who bid for the opportunity to sell Microsoft licenses to government customers. In this context, additional funds were secured under the guise of excessive discounts said to be necessary to conclude deals with local resellers. A senior executive of Microsoft Hungary approved such discounts, and false justifications were provided to Microsoft's global centralized "Business Desk" for their further endorsement. Instead of being passed onto government end customers that included Hungary's National Tax and Customs Administration (NAV) and Hungary's National Police (ORFK), the savings were used for corrupt purposes. The DOJ's Statement of Facts includes further examples where Microsoft Hungary Managers obtained discount approvals from the Business Desk after the government agency had already accepted a higher price.