Oracle pays up for price gouging

Peoplesoft's mispricing costs parent company dear as Oracle agrees $98.5 million fine

Oracle has agreed to pay a fine of $98.5 million to settle charges that its subsidiary Peoplesoft deliberately overcharged the US government when servicing its General Services Administration (GSA) Multiple Award Schedule (MAS) program.

The problems occurred between March 17, 1997 and Sept. 30, 2005, and involved Peoplesoft staff giving incorrect pricing information for software licenses and related maintenance services. Oracle purchased Peoplesoft in January 2005 after a hostile takeover and has liability for the fine.

Advertisement - Article continues below

"GSA's Multiple Award Schedule program serves vendors and government purchasers by eliminating red tape while insuring that government agencies get a fair deal for the American taxpayer's procurement dollars," said US deputy Attorney General McNulty.

"The program works well when vendors follow the disclosure rules and provide GSA with the information it needs to negotiate good prices for government purchasers. This agreement demonstrates the Department's determination to hold vendors accountable for abusing GSA's trust and damaging its programs."

The case hinged around advice given to government bodies about the prices they could expect to pay. The government says that the company understated the discounts it gives to private companies and concealed the level of discounts given for volume licence purchase.

"Because PeopleSoft did not give GSA accurate pricing information, it negotiated higher prices for its products and services than it would have obtained if GSA had known the truth," said United States Attorney Rod J. Rosenstein of the District of Maryland.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

"The substantial recovery in this case will help to ensure that vendors provide truthful information and the government pays a fair price for products and services."

The decision will also make one former employee of Peoplesoft very, very rich. James A. Hicks alerted the government to the practices of his employers and will receive a reward of $17,730,000.

Featured Resources

Key considerations for implementing secure telework at scale

Identifying the security risks and advanced requirements of a remote workforce

Download now

The State of Salesforce 2020

Your guide to getting the most from Salesforce

Download now

Fast, flexible and compliant e-signatures for global businesses

Be at the forefront of digital transformation with electronic signatures

Download now

Rethink your cybersecurity strategy for the new world

5 steps to secure the enterprise and be fit for a flexible future

Download now
Advertisement

Recommended

Andrew Daniels joins Druva as CIO and CISO
Cloud

Andrew Daniels joins Druva as CIO and CISO

22 Jul 2020
University of California gets fleeced by hackers for $1.14 million
ransomware

University of California gets fleeced by hackers for $1.14 million

30 Jun 2020
Australia announces $1.35 billion investment in cyber security
cyber security

Australia announces $1.35 billion investment in cyber security

30 Jun 2020
CSA and ISSA form cyber security partnership
cloud security

CSA and ISSA form cyber security partnership

30 Jun 2020

Most Popular

How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

3 Aug 2020
How to use Chromecast without Wi-Fi
Mobile

How to use Chromecast without Wi-Fi

4 Aug 2020
UN report points to a 350% rise in phishing websites at start of 2020
phishing

UN report points to a 350% rise in phishing websites at start of 2020

7 Aug 2020