Microsoft Increases Penalties For Partner Violations

Microsoft has strengthened penalties for partners and suppliers who violate contracts and the Partner Code of Conduct, the vendor said in an online post Monday.

For some of the worst offenders, Microsoft could revoke the solution provider’s ability to sell in certain partner programs and even remove the provider from the partner ecosystem.

“We’re committed to winning in the market ethically and in compliance with the laws and regulations of the countries/regions in which we operate,” according to the post. “Our values are enshrined in our Standards of Business Conduct: respect, integrity, and accountability. As such, we expect our partners to embrace and continually improve on these values.”

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Microsoft Ups Partners Penalties

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Microsoft could require offending solution providers to go through training, take away incentives and pay back incentives earned through the violation, according to the post.

Solution providers with repeated violations may have to participate in the Partner Accountability and Remediation program, according to Microsoft.

The Redmond, Wash.-based vendor could boot solution providers out of partner programs if they refuse to go through remediation. And Microsoft may hold the offending provider’s incentives until the provider completes the program.

Phil Walker, CEO of Manhattan Beach, Calif.-based Microsoft solution provider Network Solutions Provider, told CRN in an interview that he’s glad to see the vendor take these issues seriously.

“It’s necessary,” Walker said. “It’s a sign they are getting more involved in compliance as it relates to the partner community.

He said that while Microsoft continues to look at partner compliance issues, the vendor should also consider adding license portability for customers brought in under the terms of the new commerce experience (NCE). The controversial Microsoft program leaves solution providers potentially footing the rest of a customer’s bill if the customer tries to change solution providers before the end of a commitment.

“They have to make it less customer impactful,” he said.

Some of the ways partners can violate the Partner Code of Conduct include:

*Breaking anti-corruption and anti-money laundering laws through bribery, kickbacks and other practices

*Improperly influencing government officials, employees or political candidates through gifts, meals, travel, entertainment

*Breaking fair competition and antitrust laws

*Breaking rules around government procurement, tenders and bids, including conspiring with other partners to rig bids, place orders before tender finalization and fix prices

*Placing orders for Microsoft technologies, products, support or services without a corresponding customer order or agreement

*Cold-calling seniors, children and other vulnerable consumers to buy or subscribe to unneeded technical support or services

*Breaking conflict of interest rules in government contracting

*Not disclosing fees, commissions and compensation the partner gets from Microsoft if required for working with a government entity

*False, inaccurate and misleading advertising and marketing

*Using forced labor or child labor

*Discriminatory hiring, compensation, training access, promotions, firings and retirement due to protected statuses such as race, sex, national origin, religion, age, disability, gender identity, disability, political affiliation and veteran status

*Using discriminatory, intimidating, harassing, threatening, abusive, secually explicit, offensive and inappropriate language

*Sexual harassment

*Misbehavior at Microsoft events

*Breaking environment laws and regulations

*Using technology and software illegitimately acquired and licensed

*Using illegal methods to get competitive knowledge about products and manufacturers that compete with Microsoft

*Not having business controls for detecting and preventing unlawful conduct by employees and counterparties

*Not having an adequate training program

*Not providing reasonable assistance for a violation investigation

Microsoft has developed and improved its direct-to-partner work for compliance-related topics, compliance readiness materials and online training offerings to help solution providers keep up with compliance, according to the vendor.

Microsoft said solution providers with concerns about a business practice or compliance can contact the Microsoft Business Conduct Hotline at 877-320-MSFT within the U.S. The hotline is toll-free and open 24 hours a day.LEARN MORE: Cloud Infrastructure  | Cloud Platforms  | Cloud Security  | Cloud Software  | Enterprise Applications  | SMB Applications 

 Learn About Wade Tyler Millward


Wade Tyler Millward is an associate editor covering cloud computing and the channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at [email protected].


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