SHORT CHANGING the US government has cost HP $55 million after it settled with the US Justice Department over allegations that the firm offered cash to system integrators to buy its products.
Earlier this month, HP announced that it had come to some sort of arrangement with federal prosecutors, though it didn't disclose the amount it would be paying out. Its $55 million settlement deals not only with the kickback allegations but also resolves a claim that in 2002 the company provided dodgy pricing to the US government's primary procurement department.
US assistant attorney general Tony West said, "As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks." The only problem for West is catching the firms involved, which is easier said than done.
It is not known how much business HP managed to secure thanks to its allegedly shady dealings, however $55 million doesn't sound like all that much for a company that spent most of August in a bidding war with Dell to purchase 3Par, finally shelling out $2 billion for the cloud storage vendor. It also seems that the US Government doesn't care about HP's priors, as the firm recently announced it had secured a $800 million contract with the US Air Force to support its worldwide enterprise computing requirements.
Although the settlement might not be the hammer blow that West and his colleagues might have hoped for, it does tend to suggest that HP did use underhanded tactics to stifle competition. Then again in this industry, HP won't have been the first and, sadly, probably won't be the last. µ
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