Industrial Espionage: The Dark Side of Competitive Intelligence

As the number of businesses is increasing, new competitors are emerging in every industry. Businesses need to keep an eye on what their competitors are up to. For this, competitive intelligence professionals are in place. Competitive intelligence is the process of gathering information about the competitors in the market. It involves market research, reading reviews, surfing through competitor’s websites, or analyzing customer behaviors on their side.

Gathering competitor intelligence is important, and it’s acceptable in the market. It goes beyond a simple search on Google and gathers legitimate data about the competitor’s performance. All this data puts the receiving company at an advantage. They can prepare for any unforeseen events or test the marketplace before launching a new product. It only gets ugly when the methods of acquiring this data are unethical. That leads to espionage.

How is competitive intelligence different from industrial espionage?

The rising need for competitor analysis has led to competitive intelligence agencies. They work solely to gather information. But some companies go far and beyond to sneak into their rival’s information. They use unfair means like stealing, copying, bribing, blackmailing, and hacking into their rival’s software. This is called industrial espionage.

Industrial espionage is different from competitive intelligence as it involves unethical and illegal means like theft or trading of secrets. Everyone has the right to privacy in their business decisions and documents. While there’s a constant debate on the differentiation of the two, the Society for Competitive Intelligence Professionals (SCIP) disapproves of industrial espionage. It ascribes it to deteriorating principles and cybercrimes in the industrial sector.

Many corporations have been publicly accused of such unfair practices. It’s more prevalent in tech companies, chemical energy, automotive companies, aerospace companies where huge amounts of money are involved.

What are the chief targets of Industrial Espionage?

A lot of research and development go behind industry work. This needs both time and money. Some companies find it easier to acquire already formed data or product information. The rise of social media has only made it easier. The leakage of sensitive trade information is increasing by the day. Here are some assets that they target:

  • Trade Secrets
  • Information about Finance
  • Marketing Campaign Information
  • Client Information


How can you save yourself from industrial espionage?

Industries have both physical and digital assets. Confidential information can be compromised as hackers access the computer systems. As far as physical breaches are concerned, you can prevent them through tough industrial fencing. But the world has shifted to digital assets, and it has become harder to prevent these threats. Below are some methods you must consider:

1. Use employee monitoring software

In many cases, spies act as employees to collect sensitive information. Monitoring software helps you keep an eye on their emails, messages, app usage, or downloads. It tracks their digital activity throughout the day and notifies you in case of any suspicious activity.

For example, a corporate spy may try to access your confidential client list or finance report. The software instantly tracks this and sends you an alert. Monitoring software even takes screenshots and videos, which can be used as evidence.

2. Establish security policies

Security policies are essential for companies, and employees must be trained in that. This involves creating strong passwords, protecting log-in credentials, detecting e-mail fraud, or handling sensitive data. Employees must strictly follow these policies as there’s a high chance of theft.

A famous case of such breach involves Uber, which stole 14,000 files from Waymo. These files contained designs and blueprints from their manufacturing process. They gave $250 million in shares to Waymo when the matter was brought to light.

3. Conduct background checks

Performing background checks is crucial to know where employees have worked or studied before. There should be no links of the employee to competitors’ brands. This prevents industries from recruiting spies.

4. Establish a proper termination procedure

The termination process is as important as onboarding. An employee who’s worked with you for a long time has a lot of information about the company. Competitors reach out to such people to access that information. They use dirty tricks like manipulation and even bribing.

You must have them transfer all the information, along with company equipment like laptops and smartphones.

It’s important to draw the line between what is acceptable and unacceptable in business. Some clear-cut laws may help prevent such cases, but it’s not as easy as it may seem. Professionals call such practices unethical, but competitors don’t care for this. You may rarely see such cases in the news as they’re challenging to trace and prove. Unless there are detailed laws in place, companies will keep pushing the boundaries of competitive intelligence.

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