Oracle To Settle Government Kickbacks Lawsuit

The Associated Press reported on 31 January that Oracle has agreed to pay the US government $46 million (£29m) to settle a lawsuit it inherited from Sun Microsystems over alleged kickbacks to win government contracts.

The Department of Justice had charged that Sun, which Oracle bought in January 2010, and other IT companies paid kickbacks to New York-based systems integrator Accenture to recommend that federal agencies buy Sun products.

Whistle-blowers

The lawsuit covered software contracts that spanned a period of eight years (from 1998 to 2006) and were worth hundreds of millions of dollars.

Six other companies, including Hewlett-Packard, have settled similar litigation. HP paid $55m in its settlement.

The charges against Sun were originally raised in a lawsuit filed by two whistle-blowers in 2006. The DoJ joined their case in 2007.

The allegations by whistleblowers Neil Roberts and Norman Rille led to a spate of lawsuits against a group of IT vendors. Many of the companies have settled the claims against them. In the HP case, for example, the company was accused of paying kickbacks in exchange for favorable recommendations in connection with government contracts, and not disclosing discounts to the GSA that it was offering other customers.

As a result of the settlement, HP did not have to admit wrongdoing. Oracle also does not admit wrongdoing.

In May 2010, storage giant EMC paid $87.5m to settle its lawsuit for overcharging government agencies and participating in a kickback scheme to influence the IT decisions of federal agencies.

Other IT companies that have settled similar lawsuits include IBM, PricewaterhouseCoopers and Computer Sciences.