LTW and From Wire Reports

HP reaches settlement with DOJ in kickbacks case

PALO ALTO, Calif. – Hewlett-Packard Co. said Monday that it has agreed in principle to settle a lawsuit by the Department of Justice, which alleged that HP and other technology companies paid kickbacks to Accenture PLC in exchange for recommendations for government work.

HP denied "engaging in any illegal conduct." It said the deal will lower its fiscal third-quarter profit by 2 cents per share. That’s about $50 million given that it has 2.33 billion shares outstanding.

"We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue," HP said in a statement.

A Justice spokesman declined to comment.

The settlement still needs to be approved by the Justice Department, an Arkansas district court where the original lawsuit was filed, and government agencies.

The government joined whistleblower lawsuits against HP, Accenture and Sun Microsystems Inc. in 2007 over the arrangements, alleging violations of the False Claims Act. The companies had "alliance relationships" in which they agreed to work together, but the agreements resulted in what amounted to kickbacks in securing government contracts, it said at the time.

Microsoft Corp. was named a whistleblower lawsuit but the government declined to join the lawsuit and the case was dismissed.

Last week, the Justice Department said it was joining a fraud lawsuit against Oracle Corp. related to software contracts worth hundreds of millions of dollars.

The agency said Oracle failed to offer government customers the same discounts on its software that it offered commercial customers. As a result, the lawsuit alleges, Oracle overcharged the government on a contract that ran from 1998 to 2006.

HP shares rose 10 cents to $47.66 in after-hours trading. The stock finished regular trading up $1.52, or 3.3 percent, at $47.56.

Google’s China answer page inaccessible

BEIJING, China – A Google question-and-answer page for Chinese users was inaccessible from mainland China on Tuesday less than a month after the search giant’s Internet license was renewed amid a dispute over online censorship.

The company found no technical problems with the Hong Kong-based service, said a Google Inc. spokewoman, Courtney Hohne, in an e-mail. Phone calls to China’s Internet regulator, the Ministry of Industry and Information Technology, were not answered and the agency did not respond to questions sent by fax.

Beijing encourages Web use for education and business but tries to block material deemed subversive and closely watches sites where China’s public can leave comments. Regulators block access to social networking sites abroad such as Facebook that pro-democracy and Tibet activists have used to criticize the communist government.

Google’s future in China has been uncertain since the company announced in January it no longer wanted to cooperate with Beijing’s Web censorship and shut down its China-based search engine in March. Mainland Web surfers can reach Google’s Chinese-language site in Hong Kong, which has no online censorship, but industry analysts say users might defect to local rivals, eroding its advertising revenues.

Beijing renewed Google’s Internet license last month despite the censorship dispute, which embarrassed communist officials and prompted questions about whether they might punish the U.S. company by barring it from China. The country is the world’s most populous Internet market, with 420 million people online.

The answer page, http://www.google.com.hk/wenda , allows Chinese Web surfers to leave questions for other users to answer. Most of those posted since the service was launched two weeks ago are about consumer products and housing prices.

Google launched the site after announcing last month it would end a similar service run in partnership with a Chinese website, tianya.com.

The search page of Google’s Hong Kong site was accessible from the mainland on Tuesday.

Last week, Google triggered a false alarm when it posted a notice saying its access to its search engine and several other services from China were blocked. A few hours later, the company said its system for tracking Internet access appaered to have misinterpreted what was happening to its search, mobile and advertising searches in China.

The uncertainty over Google in China has helped rival Baidu Inc., operator of the country’s most popular search engine.

Google’s share of search revenues fell from 31 percent in the first three months of the year to 24 percent in the second quarter, according to Analysys International, a research firm in Beijing. It said Baidu’s share rose to 70 percent in the second quarter for the first time, up from 64 percent in the previous quarter.

Questions and answers about UAE’s BlackBerry ban

NEW YORK, N.Y.– Some questions and answers about the United Arab Emirates banning the use of BlackBerry’s messaging and Web services:

Q: What is being banned?

A. E-mail, messaging and Web services on BlackBerry phones, starting in October. The ban also applies to foreign visitors using roaming, but not to phone calls.

Q: Why is the United Arab Emirates banning BlackBerry e-mails?

A: In short, the corporate version of the BlackBerry system is too hard to eavesdrop on. The e-mails and messages are encrypted while in transit, and even Research In Motion Ltd., the Canadian company that makes the BlackBerry, doesn’t have the keys to decrypt them. The system is designed to keep corporate and government secrets safe, but the UAE is concerned that it could provide cover for illegal activity.

Q: Aren’t BlackBerry e-mails accessible to governments anyway?

A: Possibly, but not in a fast, easy way. The e-mails exist in decrypted form on corporate servers, but those may be overseas, and it takes time to get access to them through a legal process with warrants. RIM stresses that governments can satisfy national security and law enforcement needs without compromising commercial security requirements.

Q: Why doesn’t RIM give the UAE what it wants?

A: The company hasn’t said, but it’s likely that RIM doesn’t want to give any government wholesale access to e-mails. BlackBerry users wouldn’t trust the system to keep commercial secrets safe.

Q: Why is the UAE singling out the BlackBerry? Aren’t there other ways to communicate without a risk of eavesdropping?

A: The BlackBerry may be targeted because it is popular and provides security in an easy, prepackaged way. Also, the e-mails travel through RIM’s system overseas, even if sent between two BlackBerry users in the UAE. But it shares these features with Google Inc.’s Gmail, which is also likely to store e-mails overseas and is difficult to intercept if used in a Web browser. Corporations inconvenienced by the ban may be able to find adequate security from some other wireless e-mail system the UAE hasn’t gotten around to banning.

Q: Could other countries follow suit?

A: Saudi Arabia has already said it would do the same, starting later this month. India has complained about the BlackBerry system before, but a newspaper there, The Economic Times, reports that the government is looking at negotiating a solution.

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