In 2017, we worship technological companies like the new gods of the 21st century. Some people forget technology is merely a tool placed at our disposal by science and assume getting the latest iPhone or Galaxy will make them truly happy.
On the other hand, most tech companies are happy to take up this ‘divine’ mantle, behaving as superior entities brought down to the commoners to enlighten humanity on the true path to salvation. They use words like disruption, innovation and product/market fit and claim to be changing the world like they’re different from every other company on the planet.
Businesses exist to make money, but tech companies have caught on to the public’s fascination with new, shiny gadgets and concepts they don’t quite understand and ran with it. Some tech CEOs can barely contain their self-satisfied Messiah complex, which invariably ends up contaminating their employees.
It is particularly satisfying when tech businesses are caught acting just like any other massive corporation would – purely self-interested, money-driven and, more often than not, corrupt.
In this article, we’ll go through the 15 most corrupt tech companies in the world.
15. IBM’s anti-corruption hypocrisy
This tech giant boasts an impressive history. Founded over 100 years ago in 1911, IBM has had its problems, but it’s managed to be profitable and innovative in one of the most competitive industries in the world. Although IBM’s anti-corruption rhetoric is a valuable PR asset, that still didn’t stop the United States Department from investigating bribery charges in Poland, Ukraine and Argentina.
In 2013, IBM came to a settlement with the SEC, where it agreed to pay a $10M penalty after the SEC accused the multinational business of bribing Chinese and South Korean officials to win valuable contracts from 1998-2009.
14. Sony BMG’s virulent software
It seems like ancient history at this point, but around ten years ago it was one of the main topics of controversy in business. The music industry was up in arms against file sharing as CD sales plummetted and the likes of Britney Spears, Madonna and Limp Bizkit were forced to sign up for unemployment benefits along with Sony’s top executives (guess which part isn’t accurate?).
Sony BMG and its competitors claimed they would go out of business with Sony showing its true colours, as it loaded its CDs with a copy protection software (rootkit). When used on a PC, this rootkit would create vulnerabilities, making it incredibly easy prey for computer viruses. When they got caught the company recalled the CDs and settled in the several lawsuits that filed against it by the states of New York, California and Texas.
13. Toshiba’s creative accounting practices
In September 2015, the highly successful Japanese conglomerate Toshiba revealed that it had exaggerated its earnings by approximately $2 billion over a period seven years. This paltry amount was, in fact, more than the quadruple of the company’s its initial appraisal earlier that year. The joint CEO & President of the group Hisao Tanaka immediately left the company.
Unsurprisingly, an independent investigation revealed the firm had a culture of not questioning the management’s directives shortly after the accounting scandal surfaced. It was common practice to adulterate accounting results to hide costs and postpone losses, thereby making Toshiba look a lot more profitable than it was.
12. Microsoft’s Romanian Bribery Scandal
Before Apple established itself as the authority, Microsoft dominated the personal computer market. Bill Gates and Paul Allen founded the company and made it synonymous with quality, but also diversification, selling computer software, consumer electronics, personal computers, and IT-related services.
Despite its overwhelming success, Microsoft has recently seen its name involved in a highly public corruption scandal. Romanian authorities accused several government officials of accepting considerable bribes (over $50M) to approve Microsoft’s licensing fee increases. Some of these officials have already been tried, found guilty and sentenced to prison time ranging from 1-6 years and asset forfeitures of $1.5-10M.
11. Google’s persistent war on freedom of speech and information
Arguably the most famous internet company in the world, Google and controversy seem to walk hand in hand lately. Shortly after the company started working with the European Commission (EU’s executive branch) and during the lead up to last year’s Brexit referendum, a euro sceptic website which used to be the top result for the “EU referendum” search, mysteriously started appearing on the second page.
There also have been reports that Google cooperates with China’s Communist Party by monitoring and controlling Chinese IP addresses to only show party-approved information. Last week, a Google employee circulated a memo revealing the company’s intolerance towards different views. Google proved him right by firing him shortly after.
10. Samsung’s institutionalised corruption
This Korean tech giant has become a recurring name in corruption-related cases. The country’s chaebols are enormous family-owned conglomerates who essentially control the economy. South Korea has benefited from this by economically leapfrogging over most Asian economies to become the 4th largest economy in the whole continent in only two generations after the Korean War.
However, these days these chaebols are doing more harm than good, and the Samsung Group is as corrupt as they come. It has been caught by authorities channelling illegal funds to support South Korean presidential candidates and managed to get off on a technicality. Its chairman was forced to resign in 2008 and pay a $140M fine for tax evasion before being pardoned and brought back into the office.
9. Apple’s rotten from the inside
It’s difficult to know where to start when it comes to pinpointing Apple’s complete lack of moral fibre. It has recently settled a 5-year long battle with Samsung over patent infringement in their iPhone and iPad product lines by paying the Korean tech giant $548M. Additionally, an iPhone user accused Apple of blocking texts from Android users, although it claimed this was a bug which got fixed in the next update.
Around the same time, Apple’s vendors complained about the company’s conduct towards its reseller networks as channel partners found themselves in direct competition with Apple’s direct sales team. The company’s over reliance on sweatshops is perhaps best explained by the following stat: if Apple took into account employee benefits, vacation time and fair wages, an iPad would cost over $14,000.
8. DXC Technology’s attempt to merge corruption away
In April 2015, one of the founders of a cloud management vendor called ServiceMesh, which DXC/CSC acquired a couple of years earlier, had to step down during a bribery and corruption scandal. Shortly after in June, the Securities and Exchange Commission accused the company and some of its former executives with accounting fraud, fining them over $190M in the process.
The company was involved in its fair share of corruption scandals when it was still known as Computer Sciences Corporation. In April this year, it merged with Hewlett Packard Enterprise (after the latter’s split from HP) to form DXC Technology. Given HP’s reputation, my guess is that DXC Technology/CSC won’t be leaving the corruption spotlight anytime soon.
7. Yahoo’s obsession with Google
It’s a well-known fact that Yahoo is a poor man’s Google. The Sunnyvale-based Californian tech giant is a massive company, but it still fails to emulate the success of the world’s most dominant search engine. In yet another valiant effort to copy Google’s practices, Yahoo collaborated with the authoritarian Chinese Communist Party by sharing valuable information which allowed them to jail two journalists.
What was their crime? They tried to report dissidents might be in danger if they return to the country to mark the 15th anniversary of the Tiananmen Square massacre. Both journalists received ten-year sentences for their “hideous” crime. Thanks, Yahoo!
6. Intel’s bribery monopoly
The world’s biggest chip maker is no stranger to controversy. One of the most public cases happened in 2009 after AMD, one of Intel’s rivals, accused the company of paying billions of dollars in briberies to computer makers for them to buy Intel products instead of AMD’s.
Eventually, AMD dropped the charge in exchange for $1.25 billion from Intel after regulators in the United States, Europe, Japan and South Korea got involved. On top of it all, Rio Rancho residents have blamed Intel of releasing dangerous pollutants into the New Mexico town. Age discrimination and tax evasion lawsuits have also been filed against the company who genuinely doesn’t seem to care.
5. Alcatel-Lucent’s third-party mishaps
This French-American telecoms conglomerate built an internationally-corrupt network of bribery which sustained its business for over 16 years until it was finally brought to a halt in 2006 by a joint investigation by the United States Department of Justice and the Securities and Exchange Commission.
Alcatel-Lucent had to pay a $137M settlement fee after it was proven the company bribed public officials to secure lucrative contracts in Taiwan, Honduras, Costa Rica and Malaysia. The Paris-based firm also pledged to stop using third party sales and marketing mediators to win these contracts. It’s almost as if that’s going to change anything.
4. Oracle couldn’t care less
This multinational tech corporation has been caught out in shady dealings a few times over the last decade. In 2011, it was investigated by the Federal Bureau of Investigation due to its bribing of public officials in West Africa while it was forced to settle for $2M after its Indian subsidiary was caught creating a slush fund to pay fake vendors.
Oracle’s reputation took a further hit when it was removed from the Nasdaq OMX Sustainability Index and the FTSE4Good Index for its lack of sustainability reporting and human rights protection respectively. Furthermore, it was forced to pay a $46M settlement when one of its subsidiaries was caught bribing resellers. What a company!
3. HP’s international kickback network
Like too many other tech giants, Hewlett Packard is no stranger to cases of both moral and financial corruption. A human rights report exposed one of the brutal policies enacted in one of the company’s Chinese electronic sweatshops where workers were forced to complete their assigned task in three seconds over 10 hours of uninterrupted shifts where they had to stand over the whole period.
Additionally, in 2014 HP had to pay a +$100M settlement to United States regulators to settle a bribery dispute. The company was caught bribing public officials in Poland, Mexico and Russia so they’d win more highly lucrative IT contracts. HP claim this was done by a small group of people who no longer work for the company, but we’ve heard this one before.
2. AT&T’s Spy Network
This American telecoms behemoth has given the National Security Agency billions of emails from 2003 until 2013, in addition to allowing them to wiretap communications across their massive network. A 2015 New York Times report also revealed AT&T was extremely collaborative in complete disregard of its customers’ privacy.
After the Electronic Frontier Foundation filed a lawsuit in 2008 against AT&T and the then United States President George W. Bush for setting up this illegal spy network, Congress passed a bill protecting companies such as AT&T this type of lawsuit. If you’re going to be corrupt, you may as well be so with the collaboration of the very authorities which are supposed to be protecting citizens.
1. Siemens’ history of being on the wrong side
This entry comes as no surprise when one takes into account the fact that Siemens was in bed with the Nazi government. Given Siemens was involved in the construction of the death camps, its more recent corruption might seem like child’s play but they still get it an appearance on our list.
In 2008, the German company was involved in a string of high-profile bribery and corruption scandals, which culminated in its agreement to pay a record total of $1.6 billion in legal settlements with America and European authorities. Siemens was forced to do so after being caught bribing public officials to secure profitable contracts.
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