Foreign Bribery Suspected

Foreign+Bribery+Suspected

San Jose Mercury News/ MCT

The Microsoft investigation raises questions of what are ethical business pracitces in foreign countries and whether or not Microsoft is guilty.

Liz Berndt, Staff Writer

In mid-March, both the Securities and Exchange Commission and the Department of Justice, under the Foreign Corrupt Practices Act (FCPA), started looking into possible bribes made by Microsoft. These suspicions were first brought to the US well over a year ago when Microsoft was accused of handing out bribes to foreign government officials in return for software contracts. Although this sounds unethical and unfair, Microsoft did take steps to investigate the problem when it first was brought to their attention; they found nothing wrong within their company.

Nevertheless, the government started their own investigation in March. They are particularly concerned with foreign countries, including China, Romania and Italy.

China is a huge market; however, they are also a very cheap market. It is hard to sell something for the same price in China as in the US, making it hard to get profitable contracts. This creates a problem; either Microsoft breaks the law, or they lose money. Big companies make large amounts of money if they sign strong contracts. I would not put it above Microsoft to do everything they could to enter into a good contract.

The FCPA only applies to American based companies. This gives these companies a great disadvantage because it hurts their ability to make contracts in countries where bribery, in business deals, is common practice. This being said, huge companies like Microsoft have thousands of employees that could easily violate this law. Not only is it hard to enforce the law throughout the entirety of such a huge company, but it is also easy for headquarters to turn the other way when an employee, or group of employees, has decided to violate the FCPA.

Microsoft has not been accused of any negligence, and has given the government all they found out when they conducted their own survey. However, bribery within tech companies is common, and they could easily have missed a detail or simply glazed over it.

Offering their material to aid in investigation was smart. In the case that Microsoft is found guilty of bribery, which I believe is plausible, their cooperation will help lessen their punishment (usually a large fine). Microsoft seems to be very desperate to show they are not doing anything illegal. They have made it clear that there are over 100 people assigned to monitoring this law, but unfortunately this multi-billion dollar company is too large to completely regulate. The chances of violation of the FCPA, somewhere in the far outreach of their company, are greatly against them.