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Microsoft software fines overview:
- Who: Microsoft has agreed to pay a total of $3.3 million in fines and penalties in settlement agreements with the U.S. Treasury Department’s Office of Foreign Assets Control and the Department of Commerce.
- Why: The settlements were made to resolve charges revolving around European subsidiaries of Microsoft providing software and services to blacklisted customers on more than 1,300 instances between 2012 and 2019.
- Where: Microsoft software and services are used by consumers around the world.
- What are my options: Belkin offers products similar to Microsoft.
Microsoft has agreed to pay $3.3 million in fines and penalties to resolve claims some of its European subsidiaries provided software and services to blacklisted parties more than 1,300 times from between 2012 and 2019.
The majority of the alleged violations involved blacklisted customers in Russia and the Crimean Peninsula, according to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), Law360 reports.
The apparent unlawful transactions were reportedly conducted by third-party distributors and resellers that contracted with Microsoft to sell its software and services to a final customer, according to OFAC.
Microsoft itself was not accused of engaging with any of the individuals on OFAC’s Specially Designated Nationals and Blocked Persons list or others who were located in the embargoed countries, Law360 reports.
The apparent illegal transactions, however, did reportedly involve computers and systems belonging to Microsoft that were in the U.S., according to OFAC.
Violations committed by Microsoft’s European subsidiaries ‘not isolated or atypical in nature,’ OFAC says
In a press release, OFAC said the evident violations “were not isolated or atypical in nature, and the Microsoft entities had reason to know that such conduct was occurring.”
Further, the agency said the Microsoft entities “demonstrated a reckless regard for U.S. sanctions” by “failing to identify” that software and services totaling over $12 million had been exported from the U.S. to blacklisted customers abroad.
Microsoft “takes export control and sanctions compliance very seriously” and “that it voluntarily disclosed” the apparent infractions “to the appropriate authorities” upon discovering them, the company said in a statement, according to Law360.
“We cooperated fully with their investigation and are pleased with the settlement,” the tech giant added.
Microsoft will pay $2.9 million to OFAC and $624,000 to the U.S. Department of Commerce (DOC) in total, however, the company will only have to pay just more than half of what it agreed to pay the DOC so long as it complies with the OFAC settlement terms, Law360 reports.
The settlement agreements come on the heels of Microsoft’s March announcement it will be adding OpenAI GPT-4 language technology into the company’s Microsoft 365 business suite, including Microsoft Word, Powerpoint and Excel.
Do you use Microsoft’s programs and services? Let us know in the comments.
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