LONDON: Microsoft Corp. is being investigated by U.S. authorities over potential bribery and corruption related to software sales in Hungary, according to people familiar with the matter.
The investigation follows a series of similar probes into Microsoft business partners that surfaced in 2013 in five other countries. Microsoft MSFT, +0.47% made a push earlier this decade to expand in emerging markets, as well as smaller, middle-income countries like Hungary. In some cases, those bets have turned into legal and reputational challenges.
The U.S. Justice Department and the Securities and Exchange Commission are probing how Microsoft sold software such as Word and Excel to middleman firms in Hungary that then sold those products to government agencies there in 2013 and 2014, according to these people.
Microsoft sold some of its products to these intermediaries at steep discounts, and then these firms sold the products to the Hungarian government at closer to full price, these people said. Investigators are probing whether the middleman companies used the difference to pay bribes and kickbacks to government officials, the people said.