At what point does legitimate competitive intelligence gathering cross the line into industrial espionage, and what is it about certain intelligence gathering practices that makes them open to criticism? In order to shed light on current developments in the competitive intelligence gathering ‘industry’ and the ethical issues that are typically raised, this paper looks at three recent cases of industrial espionage, involving major multinationals, such as Procter & Gamble, Unilever, Canal Plus, and Ericsson. The argument is made that, from an ethical point of view, industrial espionage can be assessed according to three main considerations: the tactics used in the acquisition of information, the privacy of the information concerned, and the consequences for the public interest as a result of the deployment of the information by the intelligence gatherer.
Espionage is a word that brings to mind James Bond movies or the spy stories of John Le Carre, but espionage has also long been associated with business practice, too. Industrial espionage is essentially a form of commercial intelligence gathering, usually, but not exclusively, on the part of industry competitors. With global competition intensifying, finding out about rivals' products and processes has become big business, and competitive intelligence gathering is seen as an important and largely acceptable form of market research. Although industry representatives, such as the Society for Competitive Intelligence Professionals (SCIP) argue that industrial espionage, or spying, is both unethical and illegal, there is sometimes a fine line between the ‘legitimate’ tactics of competitive intelligence gathering and the ‘illegitimate’ practice of industrial espionage.
In this paper, we shall look at some high-profile cases where allegations of industrial espionage involving some of the world's top companies have hit the headlines, and in doing so, explore some of the gray areas between acceptable and unacceptable intelligence gathering practices. We begin with a brief outline of the nature of industrial espionage and competitive intelligence gathering, before outlining our three cases, and then present a set of ethical tests that should shed light on how to determine the acceptability or otherwise of the practices concerned. We conclude with a discussion of the nature and boundaries of industrial espionage in the contemporary business environment.
As the examples and discussion above attest, industrial espionage has become a significant and, in many ways, troubling aspect of contemporary business practice. It would seem that even companies with an ethical policy on intelligence gathering might accidentally encourage or even tacitly endorse questionable behaviors on the part of employees or contracted agents. In an increasingly knowledge-based competitive environment, the incentives to overstep the mark in intelligence gathering have increased significantly, and with advances in information and communication technologies, the opportunities for doing so have multiplied accordingly. Moreover, the boundaries for defining acceptable practice have also become increasingly muddied, especially now that surveillance technologies and other ‘spying’ tools and gadgets have become so easily available to companies.
What we have also seen here is a blurring of boundaries between state and industrial espionage. On the one hand, companies are now intrinsically involved in the affairs of government (including defense, antiterrorism, tax collection and investigation, welfare distribution, etc.), meaning that much ‘state’ espionage is carried out through commercial entities. On the other hand, governments rely substantially on the success of domestic companies to further their own economic goals, meaning that governments often have a major role to play in facilitating or preventing so-called ‘industrial’ espionage.
In assessing the three recent cases involving allegations of industrial espionage, we have set out three main ways in which we might determine the acceptability or otherwise of the actions involved. We have not done so in order to make definitive judgments on the three cases or on other incidences of potential espionage, but rather to examine and illustrate the types of issues that might be at stake and to give guidance on how to assess them. Industrial espionage is always going to remain in the gray areas of questionable business practice; thus, the more we are able to make sense of the problems involved, the more able we will be to deal with them competently and rationally.
Ultimately though, perhaps the greatest lesson to learn here is that it is all too easy to think about and rationalize industrial espionage simply in the context of two fiercely competitive rivals, such as Procter & Gamble and Unilever, or News Corporation and Vivendi. Looking at it this way, it might seem that there will always be an overwhelming incentive to cross the ethical threshold of acceptable intelligence gathering in order to outdo an enemy. However, if instead of thinking about businesses as one-to-one combatants, we consider them as allies operating within a web of other businesses, we might more easily recognize their mutual interests and interlinked flows of resources and rewards. As such, it is clear that industrial espionage has major implications for all industry players, whether they are directly involved in espionage activities or not. Businesses need to maintain confidence in their data integrity and security, need to offer reliance in their attitude towards privacy, and, perhaps most of all, need to establish strong relationships of trust with their key stakeholders. An industry saddled with a reputation for spying and secrecy is unlikely to be a supportive context for any business to develop such capabilities. If employees, customers, suppliers, competitors, or even regulators believe they are in the company of spies, the challenge to maintain long-term business success will be all the more testing.
