Recent news coverage of expanded allegations against Hewlett-Packard Company for violations of the Foreign Corrupt Practice Act (FCPA) serve as a reminder of the particular scrutiny the tech industry has faced under the FCPA. In the last decade, technology companies seem to have attracted a disproportionate amount of FCPA investigations and enforcement efforts. Understanding how the current FCPA enforcement environment affects tech-sector businesses can help those companies craft a strategy for managing the specific risks the industry faces.
1. The Justice Department and Securities and Exchange Commission continue to vigorously enforce the FCPA.
3. Tech companies’ heavy use of third-party agents for foreign sales creates its own FCPA compliance problems.
Technology, in particular, has seen product discounting for foreign government officials cross into legal gray areas. In addition, tech as an industry relies heavily on resellers, distributors, sales representatives, agents, and consultants for overseas sales, creating additional FCPA compliance challenges. Historical review reveals that these relationships are often the ones that give rise to tech company FCPA problems—both for enforcement activity and self-reported potential violations.