Microsoft will be paying in excess of USD 25 million in total to settle the corruption charges against it that allege the company to have resorted to illegal practices for acquiring foreign contracts. The primary allegations are concerning Hungary, where Microsoft got involved in a bribery scheme. It was revealed by the US Securities and Exchange Commission that Microsoft is entitled to pay around USD 16.6 million to settle the charges against it for violating the Foreign Corruption Practises Act.
Though the case was mainly based on Microsoft’s involvement in Hungary bribe scheme, SEC stated that it found improprieties across most of the Microsoft offices located in Turkey, Thailand, and Saudi Arabia. Apart from the USD 16.6 million payment, Microsoft will also be paying a criminal fine of USD 8.75 million for the Hungarian bribe scheme and bid-rigging. Prosecutors from SEC stated that senior executives from Microsoft were attempting to inflate the company’s margins in the software licenses deals with the Hungarian government agencies during 2013 to 2015. Microsoft falsely recorded savings as being discounts to further up their corrupt practices. Brad Smith, president of Microsoft, stated in a letter to the employees that such misconduct wasn’t acceptable and also clarified that it involved a small number of employees. He detailed the company’s plans to curtail such practices in the coming future.
Apart from the millions of dollars spent in fine, Microsoft is planning to spend another USD 1 billion, this time though for a positive reason. Microsoft, in a bid to expand its cloud services, are planning to invest USD 1 billion in OpenAI, a company that was established by the likes of Sam Altman and Elon Musk in order to fuel researches that help build Artificial intelligence in a more friendly manner. OpenAI will build new AI technologies for the Azure platform.