Busted in Budapest

The Hungarian government’s Gazdasági Versenyhivatal (GVH) announced that fines had been imposed on software giants SAP and IBM for a conspiracy to submit bids of mutual interest in 2004. U.S.-based International Business Machines Corporation, German company SAP AG and the Hungarian ISH Kft. were found to have coordinated their tenders for five projects involving Hungarian universities and hospital technology.

“The parties’ intention was … to keep competitors away by submitting parallel proposals,” judged the authority. “They jointly composed proposals, while holding strategic talks on how to keep competitors away.” GVH did not question the quality of the ISH Kft. IT solution entitled MedSAPsol, which the three companies charged claimed resulted from their cooperation. However, argued the GVH brief, the trio was acting in consent, influencing tenders and cooperating to exclude competitors. SAP and IBM were each fined 690 million forints (almost US $3.18 million).

ISH Kft. was fined 130 million forints (almost exactly US $600,000 due to its “smaller business scope. The three companies had won the bids for four of the five projects worth 13 billion forints (approximately US $60 million), thus making the fine seem like small potatoes indeed. The fines are to be paid within thirty days. Predicatably, SAP, via spokeswoman Ilona Meszaros, has stated it will appeal the decision.