A&O Shearman FCPA Digest | In the Matter of Akamai Technologies, Inc. (2016)

Source Documents

Nature of Business
Akamai Technologies, Inc. is a Delaware corporation headquartered in Cambridge, Massachusetts, which provides cloud services for delivering, optimizing, and securing online content and business applications over the internet. Akamai maintains a class of stock registered on the NASDAQ Global Select Market.

Influence to be Obtained
According to the SEC, from at least 2013 until 2015, Akamai’s Chinese subsidiary, Akamai (Beijing) Technologies, Co. Ltd. (“Akamai-China”), bribed Chinese officials in exchange for sales contracts. Under Chinese regulations, Akamai-China was required to sell its services through the use of a local third-party channel partner. This meant that Akamai would sell its services to a local channel partner and the channel partner would in turn resell those services to an end user.

The SEC claims that Akamai-China’s Regional Sales Manager schemed with a particular channel partner to offer the employees of certain end users bribes in exchange for an agreement to purchase greater than necessary services from Akamai. Many of those end users were state-owned companies. Akamai-China also provided gifts directly to end users, some of whom were Chinese government officials. The alleged bribes constituted cash, expensive gifts, and entertainment totaling approximately $187,500.

Enforcement
On June 7, 2016, the SEC announced that it had entered into an NPA with Akamai after it concluded that Akamai-China’s conduct violated the book-and-records and internal controls provisions of the FCPA. As part of the NPA, Akamai agreed to pay a total sanction of $671,885. The DOJ later publicly announced that it would decline to prosecute Akamai in accordance with the FCPA Pilot Program announced in April 2016 due to the company’s voluntary disclosure, cooperation, and remediation.