Fujitsu role in Britain’s Post Office scandal could have severe reputational consequences, analysts say
Post Office has attributed the record amount for personal cash withdrawals at its 11,500 branches to more staycations in the U.K. and people using cash to manage their budgets.
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LONDON — Fujitsu‘s role in the U.K. Post Office scandal, dubbed the “most widespread miscarriage of justice” in British history, has analysts wary of what the fallout could look like for the Japanese IT giant.
Between 1999 and 2015, a fault with the company’s Horizon computer software used by the Post Office, a state-owned private company employing thousands of people across the country, resulted in more than 700 sub-postmasters being subjected to false prosecutions. Thousands more were driven to destitution, illness and in several cases, suicide.
The U.K.’s High Court ruled in 2019 that the Horizon software was at fault for the misreported losses at Post Office branches throughout the country, and a public inquiry was ordered by the government to take place in the following year.
However, the scandal has been re-ignited following the airing of a TV docudrama earlier this month, which showed that despite the acknowledgment, the sub-postmasters had never received adequate compensation for the financial and emotional damage inflicted.
The British government has introduced legislation to exonerate all convicted sub-postmasters and set aside £1 billion ($1.27 billion) in compensation for the victims, saying it will pursue Fujitsu if an ongoing inquiry finds the company is to blame.
Despite the furor in the U.K., Fujitsu shares are only down around 2% since the turn of the year, having suffered an initial drop after the company’s European co-CEO Paul Patterson said compensating Post Office victims was a “moral obligation,” before recovering over the past week.
Former subpostmasters celebrate outside the Royal Courts of Justice in London, on April 23, 2021, following a court ruling clearing subpostmasters of convictions for theft and false accounting. – Dozens of former subpostmasters, who were convicted of theft, fraud and false accounting because of the Post Office’s defective Horizon accounting system, have finally had their names cleared by the Court of Appeal. (Photo by Tolga Akmen / AFP) (Photo by TOLGA AKMEN/AFP via Getty Images)
Tolga Akmen | Afp | Getty Images
Patterson later told U.K. lawmakers at the Business and Trade select committee on Friday that the company had “clearly let society down” and that there were “bugs errors and defects” with the Horizon software “from the very start.”
In a statement Thursday, Fujitsu said it regards the matter with the “utmost seriousness and offers its deepest apologies to the sub-postmasters and their families.”
“The U.K. statutory public Inquiry, to which our U.K. subsidiary is providing full cooperation, is examining complex events that have unfolded over many years, and we remain steadfast in our commitment to this cooperation,” the company said.
“Based on the findings of the Inquiry, we will also be working with the UK government on the appropriate actions, including contribution to compensation.”
Fallout could have ‘more negative consequences’ for Fujitsu
Tim Morse, founding partner of Asymmetric Advisors, told CNBC last week that while Fujitsu may not be on the hook for the entirety of the £1 billion compensation fund, it will have to shoulder a “reasonable financial burden,” and the company becoming persona non grata for future government contracts is “certainly a possibility.”
A spokesperson for Fujitsu wasn’t immediately available for comment when contacted by CNBC.
Members of Parliament on the Treasury select committee wrote to the government and other public sector institutions last week to demand that details of any contracts awarded to Fujitsu since 2019 be made public.
“The name of Fujitsu has been tainted, but don’t forget that Fujitsu — and previously to Fujitsu, ICL, which was very close to the U.K. government and was bought by Fujitsu in the early nineties — they’re very well embedded in U.K. government IT contracts, so actually replacing Fujitsu could be very expensive,” he told CNBC’s “Squawk Box Asia.”
He suggested the greater fear is that there could be further frailties identified in government-contracted programs, with issues already identified in Japan relating to ATM systems and national ID cards, along with an outage on the Tokyo Stock Exchange in 2020.
Mio Kato, founder of LightStream Research, told CNBC last week that he was surprised by the relatively “tepid” reaction in the stock price so far, because although the compensation payment may not be the “end of the world” for a company of Fujitsu’s size, the “reputational consequences could be more severe.”
“You do have these little issues cropping up attached to Fujitsu and while it’s impossible to completely iron out all bugs, the frequency is a bit of a concern considering that Fujitsu tends to supply their clients with really mission-critical software and systems,” he said, noting that the company may need to increase spending on quality control.
“So while this event may be quite U.K.-specific, what’s really concerning to us is the length of time over which it persisted, and the fact that even after certain evidence did seem to emerge suggesting that there were problems with their Horizon system, it wasn’t addressed in a timely manner.”
Kato suggested potential Fujitsu clients would have “significant concerns” about this aspect of the allegations.
“While this case hasn’t necessarily attracted massive attention outside of the U.K. yet, as it drags on, this could have more negative consequences for Fujitsu, so I’m still relatively cautious about the short- to medium-term outlook until we see exactly what the total fallout is,” he added.
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An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025.
Isabel Infantes | Reuters
Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.
Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.
Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.
Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.
“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”
The Nintendo Switch 2 and “Mario Kart World“ bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.
However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”
It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.
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An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
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