Three Types of Industrial Espionage
The nature of capitalism creates intense competition between companies competing for a bigger share of the market. This kind of competition leads some businesses to do whatever it takes to get ahead. In extreme cases, some companies may engage in industrial espionage to get an edge on the competition.
Industrial espionage is any activity which uses deceit to obtain privileged information from a competing company. This information can take the form of trade secrets, internal memos, sales reports or any type of sensitive data. The means by which companies try to gain information on their competition can vary widely.
Types of Industrial Espionage
Modern companies go to great lengths to protect sensitive information about their business practices. As a result, any attempts at industrial espionage must utilize creative strategies. Some examples of industrial espionage can include:
1) Fraud/False Pretenses
Also referred to as “social engineering”, this type of industrial espionage involves efforts to get company employees to unwittingly divulge information. Usually, social engineering attacks involve employees of one company attempting to infiltrate a rival company.
For example, Company A may send one or more of its employees to apply for jobs at Company B. If Company B hires any of these employees, the employees can then establish relationships with other workers at Company B or try to get positions overseeing important data.
Eventually, the infiltrated employees can record sensitive information or obtain passwords for encrypted data and report their findings back to Company A. These operations can sometimes take months or years to succeed.
2) Computer Hacking
Virtually all companies are connected to the Internet and conduct a huge amount of business online. While this creates convenience, any Internet connection is susceptible to a hacker attack.
Some companies may hire the services of hackers to break into a rival company’s computer systems. Additionally, a company may use a combination of social engineering and hacking to get an employee planted into a rival company. That employee can then install a computer virus in the rival company’s database.
3) Stealing Documents
Also known as “dumpster diving”, this industrial espionage tactic is very low-tech compared to other methods. Companies generate huge amounts of paperwork, much of which may contain private information like passwords, Social Security numbers, internal memos or payroll data.
If a company neglects to shred this paperwork and throws it out into a dumpster, it is possible for an employee of a rival company to simply jump into the dumpster and steal the paperwork.
Penalties for Industrial Espionage
The U.S. Congress passed the Economic Espionage Act in 1996 to target industrial espionage and other illegal activities. Penalties can include:
- Immediate loss of job
- Years in federal prison
- $10,000 or more in fines