SAP pays $20M to settle criminal charges in Oracle case

IDG News Service - SAP has agreed to pay just over US$20 million to settle a criminal case brought against its TomorrowNow subsidiary.

SAP Chief Financial Officer of Global Customer Operations Mark White pleaded guilty Wednesday on behalf of his company to charges that employees of TomorrowNow accessed Oracle's customer support portal without authorization and illegally downloaded software and support documents. In a plea agreement struck between SAP's TomorrowNow subsidiary and the U.S. Department of Justice, the company agreed to pay $20,004,800 in fines and submit to three years of corporate probation.

"Twenty million dollars reflects the seriousness of the conduct especially in light of the size of TomorrowNow, the revenues that it earned during its existence and in light of the restitution that is going to be paid in the civil case," said Kyle Waldinger, the Department of Justice's lead attorney on the case.

The $20 million isn't much when compared to the $1.3 billion in damages a civil jury ordered SAP to pay Oracle last year after arriving at a guilty verdict over related allegations.

SAP acquired TomorrowNow, a seller of PeopleSoft and JD Edwards support services, in early 2005, shortly after Oracle acquired both software companies. In the years after the acquisition, some of TomorrowNow's 160 employees secretly logged into Oracle's customer support portal, using logins belonging to Oracle customers to download the unauthorized material.

Oracle says they used that information to move PeopleSoft and JD Edwards customers to SAP's platform.

The exact amount that SAP should pay Oracle in restitution for these actions is still being debated. SAP has appealed the $1.3 billion jury verdict, asking for a retrial, and that case is ongoing.

In agreeing to the charges, SAP said it would cooperate with any criminal investigations into company employees related to the case, but it's not clear if any more criminal charges will be filed. The DoJ declined to comment on the matter. Speaking with reporters outside the courtroom, SAP's outside counsel, Gregory Lanier, said he had no idea whether there was an ongoing criminal investigation.

Lanier said that SAP was "pleased to get to the resolution" of the criminal case.

Oracle elected not to make an appearance in court Wednesday, but in a statement the company said, "Oracle has spent the last four years uncovering SAP's massive copyright theft and SAP finally pleaded guilty in Federal Court to criminal charges for its illegal scheme."

The case was heard at the U.S. District Court for the Northern District of California in Oakland.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com