Channel programs News

Microsoft Now Requiring Partners To Undergo Anti-Corruption Training

Kevin McLaughlin

Microsoft is now requiring its partners to educate their employees on the legal consequences of bribery and other illegal activity.

A new Microsoft partner program requirement that went into effect this month calls for partners to "provide anti-corruption training to all employees who resell, distribute, or market Microsoft products or services," Microsoft said in a document sent recently to partners, which was viewed by CRN.

"If your company does not already have anti-corruption training, you will have access to an online course through the Partner Learning Center to satisfy the requirement," Microsoft said in the document.

[Related: HP Expands Scope Of Layoffs, Says US Bribery Case Close To Resolution ]

Microsoft couldn't be reached for comment on what sort of course material the training includes and whether or not partners will have to pay for it.

The U.S. Justice Department and the Securities and Exchange Commission are currently investigating several cases of alleged bribery by Microsoft partners in China, Romania, Italy, Russia and Pakistan, The Wall Street Journal reported in August.

Hewlett-Packard, Cisco and many other enterprise vendors have made anti-corruption training mandatory for their partners. Such training typically focuses on the consequences of bribery and selling products on the gray market for tax evasion purposes, which are violations of the U.S. Foreign Corrupt Practices Act (FCPA).

The SEC and DOJ in recent years have also investigated alleged violations of the FCPA by HP and IBM employees outside the U.S.

Vendors like to refer to channel partners as extensions of their sales force, and there are many benefits to this arrangement. At the same time, rogue behavior in the channel can be a liability for vendors, and anti-corruption training is a way to address the risk.

However, the partner training can be costly, and not just from a time perspective. In 2009, HP started requiring its 154,000 partners to complete a $120 regulatory compliance-training program in order to continue doing business with the vendor, but later it dropped the fee after a backlash.

Daniel Duffy, CEO of Valley Network Solutions, a Fresno, Calif.-based Microsoft partner, told CRN he thinks anti-corruption training is a waste of time, even if it's free.

"You cannot mandate ethical behavior and common sense -- if people want to break the rules, no amount of 'training' will prevent it," Duffy said. "That's why this is an offensive insult to the vast majority of partners who do business honestly and ethically."

Valley Network Solutions is also an HP partner, and Duffy described HP's anti-corruption training as an "annoyance that consumes valuable time and staff resources, and increases the cost of doing business."

"Rather than harass good partners and implementing meaningless and ineffectual polices, these tech giants should focus their legal muscle on holding the partners who run afoul of the rules accountable," Duffy told CRN.

But Spencer Ferguson, president and CEO of Wasatch I.T., a Salt Lake City-based firm that partners with both Microsoft and HP, doesn't think the training requirement is a big deal.

"I'm not too concerned about this, so long as the requirement is in line with other vendors who require the same training," Ferguson said. "HP's training has not caused too much of an extra expense or burden for us."


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