HP to Pay $14.5 Million in Spying Settlement

Authored by Mark Hefflinger on December 7, 2006 - 2:52pm.

Palo Alto, Calif. - Three months after initial reports of the company's internal spying scandal, Hewlett-Packard has reached a civil settlement with the California attorney general's office.

Under the deal, HP will pay $14.5 million and implement a series of measures designed to ensure that its internal investigations are conducted in accordance with California law. All but $1 million of the settlement will be used to create a fund that will assist state prosecutors in investigating and prosecuting consumer privacy and information piracy violations.

The settlement doesn't affect the felony criminal charges brought against former Chairman Patricia Dunn and four others. All of pleaded not guilty. The state alleges that investigators working for the company lied to obtain the phone records of board members and reporters as they tried to locate the source of internal news leaks.

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