Cisco settles dodgy price claim for $52m

Cisco and Westcon Group North America have paid US$48 million ($52 million) to the US government to end claims they fudged pricing for Cisco products under federal agency contracts.

The US Department of Justice (DOJ) had claimed the two omitted information during negotiations which led to defective pricing for its products. 

The settlement stemmed from a 2004 lawsuit launched in the State of Arkansas by whistleblowers Norman Rille and Neal Roberts, who alleged major technology vendors were providing kickbacks to influence government deals. 

Last week Hewlett-Packard agreed to pay US$55 million to settle similar claims for contracts it had secured in 2002. 

The DOJ alleged that HP had paid kickbacks to system integrators to encourage them to recommend its products to agencies. 

The US government began investigating Oracle in July over deals it struck between 1998 and 2006.The DOJ has alleged that Oracle failed to extend private sector pricing to federal agencies.

In May EMC paid US$87.5 million to settle similar claims over its failure to deliver commercially competitive pricing.

The storage company admitted it never had the ability to make comparisons between commercial and government pricing and was also alleged to have paid kickbacks to consultants.

And in 2007 IBM and PriceWaterhouseCoopers together paid US$5.2 million to settle claims stemming from the same lawsuit.