Tech companies have been caught in corruption scandals before, but seldom on this scale. Telecom giant Ericsson has settled with the US Justice Department and SEC for just under $1.1 billion over charges of extensive corruption in several countries, including China, Saudi Arabia and Vietnam. The company had been accused of violating the Foreign Corrupt Practices Act between 2000 and 2016 by bribing officials to land customers, falsifying its records and failing to use “reasonable” accounting controls. The SEC, meanwhile, charged Ericsson with bribery that took place between 2011 and 2017.
The settlement leaves Ericsson largely free of criminal convictions that could have led to sanctions and other stiff penalties, although its Egyptian branch pleaded guilty to violating the FCPA. It’s paying about $520.6 million to the DOJ, while the remaining $539.9 million goes to the SEC. For contrast, companies like HP have paid ‘just’ tens of millions to settle smaller bribery charges.
Ericsson chief Borje Ekholm (who took the role in January 2017) told the media that he considered the corruption “completely unacceptable,” pointing out that some of those involved were executives. The company also said it had taken steps to improve both its ethics and its monitoring.
The deal likely won’t make everyone happy. Ericsson’s behavior went on for the better part of two decades, but the company will largely be off the hook — the company said it could handle the settlement with “available funds.” Still, the payout is significant enough that it might give other tech firms pause if their anti-corruption policies are lax.