HP settles BSkyB outsourcing case for £318m

The payment includes £270m that HP has already handed over to the broadcaster after a court found its IT services arm lied to win a contract

HP has agreed to pay £318m to British Sky Broadcasting, after a court found that its IT services arm EDS lied to the broadcasting company in order to win an outsourcing contract.

In January, the Technology and Construction Court ruled in favour of the broadcaster in the long-running court case, which centred on the failed design and implementation of a customer relationship management (CRM) system. EDS was appointed to build the system for British Sky Broadcasting (BSkyB) in 2000, but the contract was terminated two years in. BSkyB began legal proceedings against EDS in 2004, alleging "deceit, negligent misrepresentation and breach of contract" and demanding £709m in compensation.

On Monday, BSkyB announced the settlement, which ends the litigation between the two companies and covers damages, costs and interest. "This amount includes the interim payments of £270m that EDS has already made to Sky in February 2010," the broadcaster said in its statement.

HP has regularly referred to the case as a "legacy issue", as it only bought EDS — now HP Enterprise Services — in 2008.

"This matter is now closed, having been settled fully and finally on mutually agreed terms," an HP spokesman told ZDNet UK on Wednesday. "We won't be commenting further on this legacy issue."

At the time of the January court ruling, HP admitted that the CRM contract had been "problematic", but maintained that EDS did nothing to deceive BSkyB.


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