5 Companies That Had A Rough Week

For the week ending Nov. 8, CRN looks at IT companies that were unfortunate, unsuccessful or just didn't make good decisions.


The Week Ending Nov. 8

Topping this week's roundup of those having a rough week is HP Inc. for having to pay Hewlett Packard Enterprise millions of dollars to settle tax issues stemming from the split of the old Hewlett Packard Co. in 2015.

Also making the list is AT&T for having to pay a hefty fine for its “data throttling” practices, Trend Micro for cleaning up the mess after a rogue employee sold customer data to scammers, Aventura Technologies for being hit with federal charges for selling Chinese surveillance equipment to U.S. government agencies, and Facebook for facing an inquiry and lawsuit from its home state’s attorney general.

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Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

HP Inc. To Pay HPE $300 Million To Resolve Tax Issue From 2015 Split

HP Inc. will pay Hewlett Packard Enterprise $300 million as part of a “tax matters” termination agreement relating to the formal division of Hewlett Packard Co. into the two companies four years ago.

The Tax Matter Agreement governed the two companies’ rights, responsibilities and obligations with respect to the preparation and filing of tax returns, the control of audits and other tax proceedings, according to a filing this week with the U.S. Securities and Exchange Commission.

HP has agreed to pay HPE $200 million on or before Oct. 31, 2019, another $50 million by Oct. 31, 2020, and $50 million by Oct. 31, 2021.

AT&T To Pay $60 Million Fine To Settle Allegations Of Misleading ‘Unlimited Data” Plans

Speaking of paying up, AT&T agreed this week to cough up a $60 million fine to resolve allegations that the telecommunications giant misled millions of consumers when it promised them “unlimited” data plans, but throttled data speeds as consumers used more data.

AT&T agreed to the fine to settle a complaint brought by the Federal Trade Commission in 2014 alleging that AT&T would begin to “throttle” or reduce the speed of consumers’ data use after they used as little as two gigabytes of data in a month, according to a Reuters story on the NBC website.

The $60 million will go into a fund to provide partial refunds to current and former AT&T customers who signed up for the unlimited data plans but had their data speeds reduced, Reuters reported.

Under the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data without also disclosing any material restrictions on the data, according to the Reuters story.

Trend Micro Employee Sells Customer Data To ‘Malicious Actor’

Cybersecurity vendor Trend Micro disclosed this week that a rogue employee stole data on 68,000 consumer customers and sold it to scammers who are now calling those customers purporting to be support staff.

In a statement Tuesday, Trend Micro said it began receiving reports in August of customers “receiving scam calls by criminals impersonating Trend Micro support personnel.” After an investigation the company determined late last month that a Trend Micro employee had used fraudulent means to access a customer support database with names, email addresses, support ticket numbers and, in some cases, phone numbers.

The employee, who has been fired, sold the information to “a currently unknown third-party malicious actor.” The company has disabled the unauthorized account access and is working with law enforcement “on an ongoing investigation.”

Initially Trend Micro said the incident affected less than 1 percent of its 12 million customers. The company updated its statement on Nov. 6 to put the number at 68,000.

Aventura Charged With Selling Chinese-Manufactured Surveillance Equipment To U.S. Government

Aventura Technologies, a Commack, N.Y. manufacturer of video surveillance hardware and other security products, was hit with federal charges this week stemming from the company’s alleged scheme to sell Chinese-made surveillance equipment to U.S. government and private business customers while claiming the products were made in the U.S.

The U.S. Attorney’s Office for the Eastern District of New York brought charges of fraud, money laundering and illegal importation of equipment manufactured in China against the Long Island company and seven current and former employees, according to a statement issued Thursday by the U.S. Department of Justice.

Since 2006 Aventura relabeled more than 1,000 shipments of network security hardware and software from China as American made and then sold them to the U.S. Navy, U.S. Air Force, the Department of Energy and other U.S. government agencies.

The Chinese-made equipment also had “known cyber vulnerabilities” and created a risk to U.S. national security, according to the statement.

Facebook Hit By Lawsuit From California AG In Privacy Investigation

California Attorney General Xavier Becerra disclosed this week that his office has been investigating Facebook for more than a year over the social media giant’s data protection and privacy practices.

Becerra said on Wednesday that he has filed a lawsuit against Facebook charging that the company has refused to fully cooperate with his inquiry and failed to turn over information the AG has demanded. That includes email correspondence from CEO Mark Zuckerberg and COO Sheryl Sandberg, according to reports on the Wired, ABC and CBS websites.

The lawsuit said Facebook took more than a year to respond to questions from the AG surrounding last year’s Cambridge Analytica scandal and the company’s response to subsequent requests for information and documents has been “patently inadequate.”

The Wired report quoted a Facebook spokesperson as saying the company has “cooperated extensively” with the AG’s requests and provided thousands of pages of written responses and hundreds of thousands of documents.