Where is the line? When is it legal and ethical competition and when does it turn into illegal and unethical industrial espionage? Some of the more challenging aspects we deal with when executing a campaign are unethical competitors and ethically-challenged adversaries.

I recently came across a paper written by Mikael Simovits and Tomas Forsberg of Simovits Consulting, a Swedish IT consulting group, titled Information Warfare and Business Intelligence on the Internet. You can download the paper at their web site, and it is also one of several hundred papers available in vSente’s Armory. Simovits and Forsberg address the conflict resulting when a competitor resorts to unethical or illegal tactics. This from the paper:

The way a company, in one country, acts toward a competitor is determined by that company’s and that country’s ethical values. An action may be regarded as “industrial espionage” or “terrorism” in one country, while in other countries the same action may be regarded as a common way to gain information or gain market share. Industrial espionage falls under the collective term “Business Intelligence”. Business Intelligence is defined as an activity to overview the external environment of a company, with the intention of finding information that can be incorporated in the management process of the company[3]. Some state that BI does not incorporate any illegal activities, and that it is a passive method of getting information. It is difficult to draw a line between “Business Intelligence” and what is regarded as illegal industrial espionage[4]. The law and ethical values decide where the line is drawn regarding retrieval and use of information. The following table is a graduation of the means a company might use to get information about competing companies[5]:

The authors use a list first published in 1966 by Dr. Worth Wade, called “The Wade System of Graduation of Sources of Information.” The list describes in descending order the ethicality of tactics and sources used to generate business intelligence. This is Dr. Wade’s list:

1. Published material, and public documents such as court records.
2. Disclosures made by competitors’ employees, and obtained without subterfuge.
3. Market surveys and consultants’ reports.
4. Financial reports, and brokers’ research surveys.
5. Trade fairs, exhibits, and competitors’ brochures.
6. Analysis of competitors’ products.
7. Reports of salesmen and purchasing agents.
8. Legitimate employment interviews with people who worked for competitor.
9. Camouflaged questioning and ‘drawing out’ of competitors’ employees at technical
meetings.
10. Direct observation under secret conditions.
11. False job interviews with competitors’ employees (i.e. where there is no real intent to hire).
12. False negotiations with competitor for license.
13. Hiring professional investigators to obtain a specific piece of information.
14. Hiring an employee away from the competitor, to get specific know-how.
15. Trespassing on competitors’ property.
16. Bribing competitors’ supplier or employee.
17. ‘Planting’ your agent on competitors’ payroll.
18. Eavesdropping on competitors (e.g. via wire-tapping)
19. Theft of drawings, samples, documents and similar property.
20. Blackmail and extortion.

According to Dr. Wade the first seven methods are usually ethical and legal and the remaining thirteen are in a descending order of ethics or legality. The authors go on to note that in some countries the entire list is regarded as a usual means of gaining information.

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