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Oracle To Pay US Almost $200M To Resolve False Claims Lawsuit 114

Posted by samzenpus
from the reverse-stimulus-package dept.
coondoggie writes "In what it says is the largest False Claims Act settlement it has ever collected, the US General Services Administration will get $199.5 million plus interest from Oracle for 'failing to meet their contractual obligations.' According to the US Department of Justice, 'the settlement resolves allegations that, in contract negotiations and over the course of the contract's administration, Oracle knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Oracle knowingly made false statements to GSA about its sales practices and discounts.'"
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Oracle To Pay US Almost $200M To Resolve False Claims Lawsuit

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  • by wierd_w (1375923) on Thursday October 06, 2011 @06:27PM (#37633500)

    Sadly, this business practice indicates a financial incentive for oracle to lie to high profile clients in order to charge them extra.

    If only other high profile clients would take heed of this and avoid oracle like plague, rather than thinking the practice will stop as a result of this settlement.

    Business practices exist as the basis by which that company operates. Being shown to be a defrauder like this, shows that oracle relies on such practices, and are not likely to change.

    (Quite frankly, given the sociopathic nature of oracle's ceo, I am not surprised by this development.)

    • Indicates? Ya think? :)
      http://seclists.org/bugtraq/2005/Oct/56 [seclists.org]

      If you see the name "Oracle"... consider another solution. That includes any vendors who use them (banks, stores, etc).

  • I recently uninstalled the last of my Oracle products. I posted the following reason on their exit survey:

    "On several recent occasions, Oracle has unabashedly put greed before conscience in their treatment of their customers and others in our industry. Unfortunately for Oracle, such brazen and unconscionable behavior is a remnant of a past tolerant of such corporate narcissism. That time is at an end; and Oracle will wither and vanish into extinction as surely as other corporate dinosaurs unless it swiftly

    • by spongman (182339)

      Nice.

      One question, do you make a habit of saving your exit survey responses?

  • When do I get my check? ...What, the government keeps the money?? And Oracle... raises their prices to compensate?? So as an Oracle customer, what did *I* do to deserve this?

    • by geekoid (135745)

      If they failed to meet the obligation to you, then you should use them.

      You're post is nonsense. Probably do to you trying to be clever about something you are ignorant of.

      • by roc97007 (608802)

        I'm sorry, I can't parse either of these sentences.

      • by jmrives (1019046)

        If they failed to meet the obligation to you, then you should use them.

        You're post is nonsense. Probably do to you trying to be clever about something you are ignorant of.

        I guess we will give you the benefit of the doubt and assume that English is not even your second language.

    • Maybe you shouldn't be an Oracle customer. I hear IBM is giving them a run for their money. Ellison is acting the asshole so I guess he had it coming anyway.
    • by wierd_w (1375923)

      You accepted oracle as a supplier of mission critical software, thus putting your nads in their vise to squeeze until you cough up the dough?

    • When do I get my check? ...What, the government keeps the money?? And Oracle... raises their prices to compensate??

      Apart from the $40M that goes to the whistleblower Paul Frascella, the rest will defray the tax money already taken by Oracle on false grounds.

      So as an Oracle customer, what did *I* do to deserve this?

      You signed a contract with a corporation that shamelessly conducts illegal and immoral business practices.

      • by roc97007 (608802)

        > You signed a contract with a corporation that shamelessly conducts illegal and immoral business practices.

        You're absolutely right. Shame on me. Instead I will do business with a corporation that does *not* shamelessly conduct illegal and immoral business practices, ... um... it'll come to me... Hmm... Um,... uh... ok I got nuthin'.

        You understand, right? I don't like Oracle any more than any of the other responders to this thread, but I fail to see how this penalty hurts Oracle. Wouldn't they just

        • by symbolset (646467) *

          >Wouldn't they just consider it part of overhead, and pass the cost to customers? Wouldn't they be fools not to?

          That you can even form this second question is indicative that you will get what you deserve. Oracle could be crushed to dust tomorrow and you'd just find a new beast to exploit you.

          • by roc97007 (608802)

            You don't really know how business works, do you?

            • by Lisias (447563)

              You don't really know how business works, do you?

              Maybe he don't, but I do.

              I used to work in the automobilistic industry as a consultant. It sucked a lot - I you'll not go into details, they're irrelevant.

              I got pissed off, and gone to work on a entertainment industry. I probably got the biggest payment of my life, but it sucked even more - details are, too, irrelevant.

              So I leaved again (I got fired, but I kinda asked for it), got a very bad time and come back to work as consultant again. This time, to a bank. You will laugh on me, but my time there was one

              • by Lisias (447563)

                MY GOD! X-(

                I don't believe I noticed this just now! X-(

                Where I wrote I you'll not go into details, please read I will not go into details.

                Sorry my poor english.

            • by symbolset (646467) *

              Yes, I do understand how business works. Business is the arbitrage of value. I'm in business and doing well by doing the right thing. There's lots to be had by doing the wrong thing, and always a crash after and I'm not into that. It's a simple thing: Do it right. Don't cheat. Don't lie. Don't even let the subject of your communication enter into some subjective belief that is untrue if you can correct it. Offer your best straight deal and if the customer is a sucker for frauds and you lose him he'll

    • by AK Marc (707885)

      So as an Oracle customer, what did *I* do to deserve this?

      Became an Oracle customer? Or was that a trick question?

    • People people people why all the hate... enh, I'm sorry I can't say that with a straight face.

      Ok so seriously, I understand what all of you are saying. So let's say Ellison says to his stockholders "We got hit with a $200M fine from the government for immoral practices, congress with kittens, and generally being a dick. I personally know I'm a dick, the government caught me red handed massaging my neck to orgasm, and so being as we are demonstrably guilty, I think this fine should come directly out of the

    • by Lisias (447563)

      So as an Oracle customer, what did *I* do to deserve this?

      You bought Oracle products, god damnit!

      Of course you deserve that. And so do I deserve (the very, very few) times I spent nights trying to figure out that fscking configuration file that blowed up my apache VPS. ;-)

      You have responsability on the choices you make!

      • by roc97007 (608802)

        Ok, that's the best answer so far. I especially liked fscking. We called it that too.

  • by sanzibar (2043920) on Thursday October 06, 2011 @06:46PM (#37633664)
    "The DoJ also noted that the settlement resolves a lawsuit filed on behalf of the US government by former Oracle employee, Paul Frascella, who will receive $40 million as his share of the recovery in the case. Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the United States and share in any recovery obtained by the government."
  • by t2t10 (1909766) on Thursday October 06, 2011 @06:46PM (#37633666)

    So, when selling to the government, Oracle is required to disclose discounts it gives to other customers. Which leaves me asking: why only the government? Seems to me markets would generally benefit from more transparency, both in terms of efficiency and legal compliance. What possible reason is there not to disclose terms of sales, discounts, etc. between any two companies? Why do we allow this information to remain proprietary? Conservatives and free market folks should be up in arms, since efficient markets require information.

    And it wouldn't be hard to implement these days. If you are required to disclose a certain type of contract, you have to have done so when you conclude it in order for it to be legally enforceable.

    • So, when selling to the government, Oracle is required to disclose discounts it gives to other customers. Which leaves me asking: why only the government?

      Any individual or entity could stipulate this as a contractual requirement.

    • by Thagg (9904)

      The government often insists that they should get the best price, the greatest discount, that the supplier gives to anybody. It makes some sense, the government is often the largest customer -- I wouldn't be at all surprised if the US Federal Government was the largest single customer of Oracle.

      The interesting part of this is that the sales department often uses this when people try to negotiate a lower price. "Sorry, we are required by law to not give you a lower price than we charge the government. It'

    • by iroll (717924) on Thursday October 06, 2011 @07:04PM (#37633782) Homepage

      The government is the buyer, and they are making this disclosure a contractual requirement. If Oracle doesn't want to disclose their discounts, they don't have to sell to the government.

      If you are a buyer, you can also demand that Oracle disclose their discounts to other customers. If oracle doesn't want to disclose their discounts, they don't have to sell to you.

      But if they DO sign a contract with you, and they CLAIM that they gave you full disclosure, and they LIED to you, then you can SUE them. This is what the government is doing. There's no special law to implement, and there's no special treatment for the government.

      • by t2t10 (1909766)

        First, this is not just a "contractual requirement"; government procurement is regulated by government regulations, not just contractual terms.

        Second, your response is totally besides the point. My point was that widespread disclosure of contract terms would be a good thing. Do you disagree with that? On what grounds? What public interests are served by keeping contracts secret?

        If you agree that it would be preferable to have contract terms public, then the question reduces to how to implement that. Mo

        • First, this is not just a "contractual requirement"; government procurement is regulated by government regulations, not just contractual terms.

          Yes, it is. The government's procurement policy is internal - it only applies to government employees. My company has procurement policies that it's officers are required to adhere to when making purchases for the business as well. The only difference here is that the government is a large enough customer that it can get away with dictating very onerous terms in its purchase agreements.

          Second, your response is totally besides the point. My point was that widespread disclosure of contract terms would be a good thing. Do you disagree with that? On what grounds? What public interests are served by keeping contracts secret?

          The same public interest that prevents me from nosing through all your bills and receipts. It's none of the public's damn b

          • by t2t10 (1909766)

            The government's procurement policy is internal - it only applies to government employees.

            Sorry, but the analogy falls flat. Government and private purchases are legally different.

            The same public interest that prevents me from nosing through all your bills and receipts. It's none of the public's damn business - just like the contract between you and your employer detailing how much money you earn.

            First of all, there are free, democratic nations where salary information is public, so even that wouldn't obvi

            • Sorry, but the analogy falls flat. Government and private purchases are legally different.

              How? Are you going to actually make an argument, or simply reply with "no its not"?

              The analogy with bills and receipts also falls flat; I wasn't suggesting to let the government rifle through your private papers. I was suggesting that if you want a particular class of contract to be enforceable through a public court, you should have to make it public

              So you wish to withhold justice unless people comply with your demands to let government rifle through their private papers. That's not a particularly useful distinction.

              Finally, even if you think that salary falls under a "right to privacy", there is a difference between privacy for human beings and privacy for corporations.

              So a business run by one person wouldn't be required to divulge this (after all, he's a person!), but a business run as a corporation would (it's a corporation, and therefore eeeevil).

              So, you haven't presented much of an argument so far other than "that's the way it has always been done".

              And you haven't presented much of an argument so far other than "I want to

              • by Lisias (447563)

                So, you haven't presented much of an argument so far other than "that's the way it has always been done".

                And you haven't presented much of an argument so far other than "I want to know, so you should be compelled to tell me".

                As a matter of fact, he did. If people enough stands for it, so it will be. It's what happens on a democracy.

                Business should not be granted more rights than people have. The government should be by the people, and for the people - or we will end up in a monetary dictatorship....

                Oh, wait....

                • As a matter of fact, he did. If people enough stands for it, so it will be. It's what happens on a democracy.

                  So, given that this isn't happening, the current state of affairs is perfectly acceptable, and no argument is necessary. Sweet.

                  • by Lisias (447563)

                    So, given that this isn't happening, the current state of affairs is perfectly acceptable, and no argument is necessary. Sweet.

                    Yep. But "bittersweet" would be a better choice of word, IMHO.

                • by t2t10 (1909766)

                  As a matter of fact, he did. If people enough stands for it, so it will be. It's what happens on a democracy.

                  Part of a democracy is to have meaningful, substantive discussions, something you and the GP seem incapable of.

                  • by Lisias (447563)

                    As a matter of fact, he did. If people enough stands for it, so it will be. It's what happens on a democracy.

                    Part of a democracy is to have meaningful, substantive discussions, something you and the GP seem incapable of.

                    And you are doing a soooo great work doing that by making personal attacks, isn't?

    • by mbkennel (97636) on Thursday October 06, 2011 @10:25PM (#37635062)

      "Why do we allow this information to remain proprietary? Conservatives and free market folks should be up in arms, since efficient markets require information."

      In practice, it's because most 'mainstream' people in the USA with any clout who describe themselves as conservatives & free markets (e.g. editorial line of the Wall Street Journal) are not actually true free marketers, instead they are class advocates for the wealthy and powerful.

      Policies which get in the way of high profit margins for powerful corporations and people are disfavored, such as anti-trust regulations, or indeed any action to ensure true price-transparency and remove barriers to competitive substitution.

      For instance, the Wall Street Journal editors strenuously argue against rigorous randomized controlled studies funded by Medicare which evaluate head-to-head effectiveness, risks, and cost of pharmaceuticals. Because such information in practice might result in lower pharmaceutical profitability and lower government spending.

      This is how the _Economist_ differs from the _Wall Street Journal_: the first is an advocate for capitalism, the second is an advocate for wealth.

      • Your argument is very confused when it comes to the value of information. Specifically, the information concerning discounts. On the one hand, that info is very valuable because it can influence the cost of goods & services. On the other hand, you want it to be given away freely (or taken away by the force of government). Not sure how this jives with your personal definition of capitalism - I suspect you haven't thought of the disconnect.
      • This is the most coherent and insightful comment I have seen in a long time.
    • by PickyH3D (680158)

      I tend to agree that it would be beneficial to would-be buyers, but I do not think that it would always be beneficial to would-be sellers because it would likely serve to artificially drive prices down for them at a much faster rate than might be otherwise warranted.

      I do think that the government (all public organizations really) should do this for two reasons:

      1. Outsiders could possibly tip them off that a better rate is available.
      2. Outsiders and other public entities could benefit from a pre-negotiated r

  • F_ck Oracle (Score:4, Interesting)

    by TheGreatDonkey (779189) on Thursday October 06, 2011 @06:56PM (#37633732)
    At a previous employer, we were a moderately sized company with a significant Oracle DB back-end behind an online platform. While the relationship had been rather professional in the beginning, Oracle's sales tactics over the years have really taken a turn to the point of being beyond what I ever saw from Microsoft in the 90's. As an existing DB customer, we were looking for an SSO solution to the platform. Oracle has such a bundle, and in exchange for buying the solution, our VP negotiated for them to provide several weeks of consulting services to help implement. Months later, it was a disaster (its a hodgepodge of companies they have purchased over the years and nothing overly coherent) and so the org decided to completely abort and go in another direction. We agreed to part ways and let them keep the up front cost and first year of support, but come the end of our support year, asked to remove the recurring support option on our contract for this software we no longer used. The two sales folks in charge of our contract were afraid of looking like they lost an option, and decided to strong-arm and said that if we pushed to have this line item removed, they would increase the support costs of all the remaining items we continued to use beyond what we would pay if we just kept the line item. We were now forced to continue to pay for a completely separate SKU/product we were not using if we wished to maintain consistent terms on the Oracle DB we could not easily displace.

    And if you want to see the shit they have been pulling with CPU's going multi-core and beyond over the past several years, look up the crap they pulled with HP when they tried to provide a BIOS option to lock a multicore CPU down to a single one to allow the server to remain Oracle compliant. Their explicit BIOS notes said as much at one point. Hint: F_ck Oracle again. You have no choice in this model of growing core density but to continue to pay more to Oracle, even if you hard-limit the cores down.
    • That was the longest description of bundling I've ever read. It's a pretty common practice used by fast food chains, service providers, manufacturers, etc.

      • by etymxris (121288)

        It's not bundling. The customer was threatened with having to pay more than they ever did before they even considered installing the SSO solution. It'd be like buying a combo meal, then getting an apple turn over, then deciding you don't want the apple turnover, then being charged more for the original combo meal.

        • by sjames (1099)

          More like you buy a combo meal, then buy a turnover separately, but the turnover has a rat in it so you decide you don't want another one. They tell you if you don't buy it anyway, they'll make sure you can't eat at all for the next few weeks.

    • by jezwel (2451108)
      Document the risk that your vendor is going to increase pricing and let your CEO/CFO work it out. Ensure you have multiple supported platforms where possible to play vendors off against each other. Yes you need talented staff and this may only work in larger companies; for mine we have Oracle, MS, and IBM database deployments - we spend enough that it can save $$$ by keeping vendors a bit more honest.

      alternative (that I advocate where I can influence or choose) is opensource. Unfortunately It's going to

    • by symbolset (646467)

      OK, this is going to read like a troll but I really want to know. I've never used OracleDB, though I've had a few customers who do. I've used others, including MySQL and Postrgres and some long dead. They're wonderful. They cluster nicely, they answer queries in predictable ways. You give 'em tuples, they give 'em back when you ask for them - and that's about it. MySQL and Postgres take advantage of modern tech like 12-core processors, 10Gbps Ethernet or Infiniband, PCIe attached, Fiber attached, SAS

  • by EmperorOfCanada (1332175) on Thursday October 06, 2011 @07:02PM (#37633766)
    An Oracle salesperson lied? That has to be the first time. Oracle never lies.
    They named themselves after a rather deceitful figure from Greek mythology so this is sort of funny to see them proven to be a bunch of lying turds.
    Every time I have ever dealt with Oracle I was left with a foul taste in my mouth.
  • unfortunately, in order to really make a lasting impression on companies that pull shit like this, you have to do real damage to them. make them pay 20% of their net worth and inform them it will be double that next time and they wont make the mistake of pulling that shit again. if that happened, everyone involved would likely get tossed to the wolves.

    • by Lehk228 (705449)
      better would be a do not purchase order, all agencies prohibited from buying anything new from oracle and can only expand an oracle installation if it would be more than 50% more expensive to use a suitable alternative
  • ... are the agencies that overpaid Oracle, probably by (a lot) more than the amount of the settlement. The funds will be returned to the general revenue, and the government programs Oracle ripped off will never be reimbursed. That means Johnny doesn't have as many bullets to shoot at Al Qaeda, because the logistics chain is out the extra money they paid Oracle. It also means that contractor Jane got laid off, because the money to pay her went to Oracle instead.
  • ...that the tens of thousands of people in the Oracle Sales organization have no idea what discounts are being given to all their customers. My dozen or more Oracle reps don't even know what each of them has sold me over the last 2 years. Oracle has the most dysfunctional and customer-unfriendly Sales organization in the industry. I don't want different Sales reps for Databases, ERP Apps, Hyperion, Middleware, Identity Management, etc, etc AND I don't want to be shifted around from an industry vertical a

  • They'll pass the price on to their locked-in customers, outsource another few divisions to Elbonia, or just find more ways to avoid paying corporate tax. Either way, it won't change their behaviour one whit: it's just the cost of doing business.
  • ...somebody forgot to pay their protection money to some Congressional committee member. Defense, telecom, and other seasoned players know that this is part of the game. Oracle needs to put on their big-boy pants and step up to the plate if they want to play in this league.
  • Any way to see what the discounts, etc were that are part of this contract? Freedom of Information request?

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