Oracle settles over inherited liability

10 October 2006
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11 October 2006 | Paul Snell

Software provider Oracle is to pay the US government a $98.5 million (£53 million) settlement after a company it acquired was alleged to have been overcharging customers.

Software developer PeopleSoft had faced a lawsuit over claims it had "understated" the discounts it gave to commercial customers. PeopleSoft is now owned by Oracle, which inherited the liability.

The General Services Administration (GSA), the US government's federal procurement agency, alleged that under its contract with PeopleSoft it had paid inflated prices between March 1997 and September 2005.

It also alleged that PeopleSoft did not disclose the "true nature" of a programme that offered buyers greater discounts according to the number of products they bought at one time.

The US Department of Justice said the payout was the largest obtained in a civil settlement under the False Claims Act. The whistleblower, a PeopleSoft employee who first bought the case to the government's attention, will receive $17.7 million of the settlement.

US attorney Rod Rosenstein said in a statement: "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."

SMoct2006

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