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.
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