Microsoft is reportedly under investigation for claims of foreign bribery in China and other countries. The Wall Street Journal reports that federal investigators in the US are investigating claims that the software giant bribed foreign government officials to gain software contracts. Officials from the Department of Justice and the Securities and Exchange Commission are said to be investigating the claims from a former Microsoft employee in China. The investigation is also said to involve Microsoft's ties to resellers and consultants in Romania and Italy.
Allegations center around kickbacks to officials
The allegations center around claims that a Microsoft executive in China was instructed to provide kickbacks to Chinese officials in return for contracts. Microsoft is said to have investigated the allegations internally, but the whistleblower who was involved in tipping off the company was the subject of a labor dispute with Microsoft in China. The allegations are at least three years old, according to the report. Another part of the investigation includes claims that involve loyalty programs. It is claimed that Microsoft's Italian arm used consultants as a way to provide gifts and trips to Italian procurement officials in return for government business.
The investigation is understood to be in the early phases. We've reached out to Microsoft to provide comment and we'll update you accordingly.
Update: Microsoft says it takes "all allegations brought to our attention seriously, and we cooperate fully in any government inquiries." In a blog post by John Frank, VP & Deputy General Counsel, the company notes that while the matters are important and Microsoft will review them, such allegations can be found to lack any merit. Frank also notes that, ironically, The Wall Street Journal itself is also under investigation over allegations of bribery in China.
"In a community of 98,000 people and 640,000 partners, it isn’t possible to say there will never be wrongdoing," explains Frank. "Our responsibility is to take steps to train our employees, and to build systems to prevent and detect violations, and when we receive allegations, to investigate them fully and take appropriate action. We take that responsibility seriously."