Out-Law / Your Daily Need-To-Know

HP settles spying charges with Californian AG

Out-Law News | 12 Dec 2006 | 4:21 pm | 1 min. read

Hewlett Packard has settled the spying case brought against it by the Californian Attorney General's office with a $14.5 million payout. Criminal cases resulting from the incidents are unaffected and can continue as normal.

The payment will mostly go to fund similar investigations of other companies, while just $650,000 will cover statutory damages. The deal involves the AG agreeing not to pursue any further civil action against the company or its directors and involves no finding of liability on HP's behalf.

Earlier this year the computer and printer maker was caught up in a boardroom spying scandal when it emerged that agencies working for it had acquired and analysed telephone records of board members without their permission.

The crisis deepened when it emerged that not only were journalists' phone records also acquired, but one journalist was followed and a journalist received emails designed to trace subsequent email traffic.

HP chairwoman Patricia Dunn eventually resigned over the issue and remains the subject of a criminal case, along with four others at the company.

“The Hewlett-Packard incident has helped shine a national spotlight on a major privacy protection problem,” said AG Bill Lockyer.

“Fortunately, Hewlett-Packard is not Enron. I commend the firm for co-operating instead of stonewalling, for taking instead of shirking responsibility, and for working with my office to expeditiously craft a creative resolution," he said.

Of the sum paid, $13.5m will create a new 'privacy and piracy fund' which law enforcement agencies will use to track privacy breaches and target copyright violations. The sum of $650,000 will be paid in civil penalties and $350,000 will cover the costs of the AG's office in investigating HP.

“We are pleased to settle this matter with the attorney general and are committed to ensuring that HP regains its standing as a global leader in corporate ethics and responsibility,” said HP chief executive Mark Hurd.