Famous Cases of Corporate Espionage

TSCMCorporate Espionage, Cyber Security, Spying

Famous Cases of Corporate Espionage.  For as long as there has been commerce, there has been espionage. The methods for spying on competitors have changed over time, but the desire to uncover a rival’s secrets has not. Here’s a sample of some notable cases of corporate espionage.

1. Hot Commodity

Père d’Entrecolles was a French Jesuit missionary in the early 1700s. By some descriptions, he was also an industrial spy. While in China, which was the leading maker of high-quality porcelain, he learned the secret techniques for manufacturing the ceramic by gaining access to the kilns, studying Chinese books, and getting “many particulars from my neophytes, several of whom work in porcelain.” D’Entrecolles then spelled out that information in letters sent to France. “Nothing but my curiosity could ever have prompted me to such researches,” he wrote, “but it appears to me that a minute description of all that concerns this kind of work might, somehow, be useful in Europe.” Photographer: Getty Images

2. Steeped in Tea’s Secrets

In the 1800s, Britain had a thirst for tea, a brew monopolized by China. So the London-based East India Co. hired Scottish botanist and adventurer Robert Fortune to smuggle the tea’s plants, seeds, and secrets out of China and into British-ruled India. Disguised as a Chinese merchant, he succeeded, and within his lifetime the production of tea in India surpassed China’s. It was the “greatest single act of corporate espionage in history,” according to Sarah Rose, author of For All the Tea in China. Photographer: Justin Mott/Redux

3. Driving Competition

In 1993, General Motors accused Volkswagen of industrial espionage after Jose Ignacio Lopez, the chief of production for GM’s Opel division, left to join the rival German automaker, along with seven other executives. GM claimed its corporate secrets were used at VW. In the end, the companies agreed to one of the largest settlements of its kind: GM would drop its lawsuits in exchange for VW’s pledge to buy $1 billion of GM parts over seven years. In addition, VW was to pay GM $100 million.Photographer: Bloomberg

4. Razor Burn

In 1997, an engineer who worked with Gillette to help develop its next generation shaver system disclosed confidential information to the company’s competitors. Steven Louis Davis, an employee at Wright Industries Inc., a designer of fabrication equipment that was hired by Gillette, faxed or e-mailed drawings of the new razor design to Warner-Lambert, Bic, and American Safety Razor. Davis pled guilty to theft of trade secrets and wire fraud and was sentenced to 27 months in prison. He told the court he stole the information out of anger at his supervisor and fear for his job. Photograph: Getty Images

5. Oracle’s Trash Talk

In June 2000, Oracle Chief Executive Larry Ellison said it was doing its “civic duty” by hiring a detective agency to investigate groups that supported Microsoft. Oracle employed Investigative Group International to look into actions by two research organizations, the Independent Institute and the National Taxpayers Union, that were releasing studies supportive of Microsoft. Oracle said it sought evidence that the groups were receiving financial support from Microsoft during its antitrust trial. Oracle admitted ties to Investigative Group after news reports said the detective agency had tried to buy trash from two cleaning women at the Association for Competitive Technology, a research group that Microsoft backed. Photographer: Bloomberg

6. Operation Shady RAT

In what was described as one of the largest cyberattacks, more than 70 companies, governments, and nonprofit organizations were hacked by spies beginning in 2006, according to security company McAfee, which didn’t name the perpetrator in its report. Dell SecureWorks, another security company, traced the same attacks and pointed to China as the source of the attacks. Victims included a U.S. real estate company, a New York media organization, defense contractors, a South Korean steel and construction company, the International Olympic Committee, and the World Anti-Doping Agency. Hackers took information from some of the victims over a period as long as two years. Photograph: Getty Images

7. HP Spies on Itself

Hewlett-Packard’s board became ensnared in a scandal in 2006 after the company spied on its directors, reporters, and employees in a probe to ferret out the source of boardroom news leaks. Investigators hired by the company obtained personal phone records by posing as reporters and company directors. They also trawled through garbage and followed reporters. As a result, then-Chairman Patricia Dunn, who approved the spying, was fired. HP also agreed to pay $14.5 million to settle an investigation by California’s attorney general, $6.3 million to settle shareholder lawsuits, and an undisclosed amount to settle a case filed by journalists at the New York Times and Business Week, which is now owned by Bloomberg. Photographer: Bloomberg

8. Drilling for Secrets

Hackers stole proprietary information from six U.S. and European energy companies, including Exxon Mobil, Royal Dutch Shell, and BP, according to investigators and one of the companies. McAfee said the attacks resulted in the loss of “project-financing information with regard to oil and gas field bids and operations.” It also said the attacks, dubbed Night Dragon, originated “primarily in China” and began in November 2009. Marathon Oil, ConocoPhillips, and Baker Hughes were also hit, according to people familiar with the investigations. Hackers targeted computerized topographical maps worth “millions of dollars” that locate potential oil reserves, said Ed Skoudis of InGuardians, a security company. Photographer: Bloomberg

9. Lodging a Complaint

In April 2009, Starwood Hotels & Resorts Worldwide sued Hilton Hotels over trade secrets. Starwood had claimed two former Starwood executives hired by Hilton stole information about Starwood’s W hotel brand to develop the Denizen line of properties. Ross Klein and Amar Lalvani were involved in developing Starwood’s “lifestyle and luxury” hotels, including the St. Regis, W, and Luxury Collection brands, and downloaded confidential Starwood information to use later at Hilton, according to the complaint. In 2010, Starwood settled its case and said Hilton was ordered to make sure “the conduct that occurred does not occur again.” Photographer: Bloomberg

10. Going After Google

In a January 2010 blog post, Google disclosed that it detected the previous month a highly sophisticated cyberattack originating from China that resulted in the theft of its intellectual property. The company said evidence suggested that a primary goal of the attackers was to access the Gmail accounts of Chinese human rights activists. Google said a wide range of companies were also targeted, including those in the finance, technology, media, and chemical industries. “This is a big espionage program aimed at getting high-tech information and politically sensitive information,” James A. Lewis, a cyber and national security expert at the Center for Strategic & International Studies, told the Washington Post. Photographer: Bloomberg

Bloomberg – 20 September 2011