It also encourages researchers to do research, by making it less likely they'll do a pile of research only to be told "sorry, we already found this, you get nothing". Right now, pursuing a bounty is a risky proposition; this makes it less risky.

Yeah, good point. "Hush money" may have been a little too harsh.

1/10th of what you expected is close to nothing though.

I wonder how often it happens that a company lies (or stretches the truth) about already knowing about a vulnerability to avoid paying a bounty. If it happens even sometimes, the 10% might provide additional incentive for researches to target Microsoft. Even if they don't get a full payout, at least they get something.

A company would never lie. Especially Microsoft.

Microsoft is not lying about vulnerability discovery.

My sarcasm detector is acting a little wonky - there is no real reason for Microsoft to lie about this, it isn't exactly breaking the bank for them.

I very much doubt they would lie about it; but if the amount in question was so little that they wouldn't care about it, they would just pay the full price.

Microsoft is composed of people. The people we worry about here, are the ones who might be incentivised to discover exploits before an outsider. They would have an incentive to back-date their work, or their subordinate's work.

They're not stupid. If they cared so much more about pinching every last dollar than about security, they wouldn't have launched the bug bounty program at all.

BTW, as others have mentioned, this is strictly better than the policy of other bug bounties until now, which is "We already found this, so you get nothing"