Oracle Will Shell Out $46M to Settle Kickbacks Lawsuit

By Chris Preimesberger  |  Posted 2011-01-31 Print this article Print

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

The Associated Press reported Jan. 31 that Oracle has agreed to pay the U.S. government $46 million 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.

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 $55 million in its settlement.

The charges against Sun were originally raised in a lawsuit filed by two whistleblowers 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 General Services Administration 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 $87.5 million 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.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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