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Industrial espionage, economic espionage, corporate spying, or corporate espionage is a form of
espionage
Espionage, spying, or intelligence gathering is the act of obtaining secret or confidential information (intelligence) from non-disclosed sources or divulging of the same without the permission of the holder of the information for a tangibl ...
conducted for
commercial
Commercial may refer to:
* a dose of advertising conveyed through media (such as - for example - radio or television)
** Radio advertisement
** Television advertisement
* (adjective for:) commerce, a system of voluntary exchange of products and s ...
purposes instead of purely
national security
National security, or national defence, is the security and defence of a sovereign state, including its citizens, economy, and institutions, which is regarded as a duty of government. Originally conceived as protection against military atta ...
.
While political espionage is conducted or orchestrated by governments and is international in scope, industrial or corporate espionage is more often national and occurs between companies or
corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
s.
Forms of economic and industrial espionage
Economic or industrial espionage takes place in two main forms. In short, the purpose of espionage is to gather knowledge about one or more organizations. It may include the acquisition of
intellectual property
Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...
, such as information on industrial manufacture, ideas, techniques and processes, recipes and formulas. Or it could include sequestration of proprietary or operational information, such as that on customer datasets, pricing, sales, marketing, research and development, policies, prospective bids, planning or marketing strategies or the changing compositions and locations of production. It may describe activities such as theft of
trade secrets
Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily as ...
,
bribery
Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
,
blackmail
Blackmail is an act of coercion using the threat of revealing or publicizing either substantially true or false information about a person or people unless certain demands are met. It is often damaging information, and it may be revealed to fa ...
and technological surveillance. As well as orchestrating espionage on commercial organizations, governments can also be targets – for example, to determine the terms of a tender for a government contract.
Target industries
![Lincoln MKC test vehicle](https://upload.wikimedia.org/wikipedia/commons/0/02/Lincoln_MKC_test_vehicle.jpg)
Economic and industrial espionage is most commonly associated with technology-heavy industries, including computer software and hardware,
biotechnology
Biotechnology is the integration of natural sciences and engineering sciences in order to achieve the application of organisms, cells, parts thereof and molecular analogues for products and services. The term ''biotechnology'' was first used b ...
,
aerospace
Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial and military applications. Aerospace engineering consists of aeronautics and astrona ...
,
telecommunications
Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...
, transportation and engine technology,
automobiles
A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, seat one to eight people, have four wheels, and mainly transport people instead of goods.
The year 1886 is regarded as ...
,
machine tools
A machine tool is a machine for handling or machining metal or other rigid materials, usually by cutting, boring, grinding, shearing, or other forms of deformations. Machine tools employ some sort of tool that does the cutting or shaping. All m ...
,
energy
In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
,
materials
Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geologic ...
and
coatings
A coating is a covering that is applied to the surface of an object, usually referred to as the substrate. The purpose of applying the coating may be decorative, functional, or both. Coatings may be applied as liquids, gases or solids e.g. Powder ...
and so on.
Silicon Valley
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical areas San Mateo County ...
is known to be one of the world's most targeted areas for espionage, though any industry with information of use to competitors may be a target.
Information theft and sabotage
Information can make the difference between success and failure; if a
trade secret
Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily asc ...
is stolen, the competitive playing field is leveled or even tipped in favor of a competitor. Although a lot of information-gathering is accomplished legally through competitive intelligence, at times corporations feel the best way to get information is to take it. Economic or industrial espionage is a threat to any business whose livelihood depends on information.
In recent years, economic or industrial espionage has taken on an expanded definition. For instance, attempts to sabotage a corporation may be considered industrial espionage; in this sense, the term takes on the wider connotations of its parent word. That espionage and
sabotage
Sabotage is a deliberate action aimed at weakening a polity, effort, or organization through subversion, obstruction, disruption, or destruction. One who engages in sabotage is a ''saboteur''. Saboteurs typically try to conceal their identitie ...
(corporate or otherwise) have become more clearly associated with each other is also demonstrated by a number of profiling studies, some government, some corporate. The United States government currently has a polygraph examination entitled the "Test of Espionage and Sabotage" (TES), contributing to the notion of the interrelationship between espionage and sabotage countermeasures. In practice, particularly by "trusted insiders", they are generally considered functionally identical for the purpose of informing countermeasures.
Agents and the process of collection
Economic or industrial espionage commonly occurs in one of two ways. Firstly, a dissatisfied employee appropriates information to advance interests or to damage the company. Secondly, a competitor or foreign government seeks information to advance its own technological or financial interest. "
Moles Moles can refer to:
* Moles de Xert, a mountain range in the Baix Maestrat comarca, Valencian Community, Spain
* The Moles (Australian band)
*The Moles, alter ego of Scottish band Simon Dupree and the Big Sound
People
*Abraham Moles, French engin ...
", or trusted insiders, are generally considered the best sources for economic or industrial espionage. Historically known as a "patsy", an insider can be induced, willingly or under duress, to provide information. A patsy may be initially asked to hand over inconsequential information and, once compromised by committing a crime, blackmailed into handing over more sensitive material. Individuals may leave one company to take up employment with another and take sensitive information with them. Such apparent behavior has been the focus of numerous industrial espionage cases that have resulted in legal battles. Some countries hire individuals to do spying rather than the use of their own intelligence agencies. Academics, business delegates, and students are often thought to be used by governments in gathering information. Some countries, such as Japan, have been reported to expect students to be debriefed on returning home. A spy may follow a guided tour of a factory and then get "lost". A spy could be an engineer, a maintenance man, a cleaner, an insurance salesman, or an inspector: anyone who has legitimate access to the premises.
A spy may break into the premises to steal data and may search through waste paper and refuse, known as "dumpster diving". Information may be compromised via unsolicited requests for information, marketing surveys, or use of technical support or research or software facilities. Outsourced industrial producers may ask for information outside the agreed-upon contract.
Computers have facilitated the process of collecting information because of the ease of access to large amounts of information through physical contact or the Internet.
History
Origins
![Lettre du pere Entrecolles 1712 du Halde 1735](https://upload.wikimedia.org/wikipedia/commons/b/bb/Lettre_du_pere_Entrecolles_1712_du_Halde_1735.jpg)
Economic and industrial espionage has a long history. Father
Francois Xavier d'Entrecolles, who visited
Jingdezhen
Jingdezhen is a prefecture-level city, in northeastern Jiangxi province, with a total population of 1,669,057 (2018), bordering Anhui to the north. It is known as the "Porcelain Capital" because it has been producing Chinese ceramics for at leas ...
,
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
in 1712 and later used this visit to reveal the manufacturing methods of
Chinese porcelain
Chinese ceramics show a continuous development since pre-dynastic times and are one of the most significant forms of Chinese art and ceramics globally. The first pottery was made during the Palaeolithic era. Chinese ceramics range from construc ...
to Europe, is sometimes considered to have conducted an early case of industrial espionage.
Historical accounts have been written of industrial espionage between
Britain
Britain most often refers to:
* The United Kingdom, a sovereign state in Europe comprising the island of Great Britain, the north-eastern part of the island of Ireland and many smaller islands
* Great Britain, the largest island in the United King ...
and
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
. Attributed to Britain's emergence as an "industrial creditor", the second decade of the 18th century saw the emergence of a large-scale state-sponsored effort to surreptitiously take British industrial technology to France. Witnesses confirmed both the inveigling of tradespersons abroad and the placing of apprentices in England. Protests by those such as ironworkers in
Sheffield
Sheffield is a city status in the United Kingdom, city in South Yorkshire, England, whose name derives from the River Sheaf which runs through it. The city serves as the administrative centre of the City of Sheffield. It is Historic counties o ...
and steelworkers in
Newcastle Newcastle usually refers to:
*Newcastle upon Tyne, a city and metropolitan borough in Tyne and Wear, England
*Newcastle-under-Lyme, a town in Staffordshire, England
*Newcastle, New South Wales, a metropolitan area in Australia, named after Newcastle ...
, about skilled industrial workers being enticed abroad, led to the first English legislation aimed at preventing this method of economic and industrial espionage. This did not prevent
Samuel Slater
Samuel Slater (June 9, 1768 – April 21, 1835) was an early English-American industrialist known as the "Father of the American Industrial Revolution" (a phrase coined by Andrew Jackson) and the "Father of the American Factory System". In the ...
from bringing British textile technology to the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
in 1789. In order to catch up with technological advances of European powers, the US government in the eighteenth and nineteenth centuries actively encouraged intellectual piracy.
American founding father and first U.S. Treasury Secretary Alexander Hamilton advocated rewarding those bringing "improvements and secrets of extraordinary value" into the United States. This was instrumental in making the United States a haven for industrial spies.
20th century
East-West commercial development opportunities after World War I saw a rise in
Soviet
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
interest in American and European manufacturing know-how, exploited by
Amtorg Corporation. Later, with Western restrictions on the export of items thought likely to increase military capabilities to the
USSR
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
, Soviet industrial espionage was a well known adjunct to other spying activities up until the 1980s. ''
BYTE
The byte is a unit of digital information that most commonly consists of eight bits. Historically, the byte was the number of bits used to encode a single character of text in a computer and for this reason it is the smallest addressable unit ...
'' reported in April 1984, for example, that although the Soviets sought to develop their own microelectronics, their technology appeared to be several years behind the West's. Soviet CPUs required multiple chips and appeared to be close or exact copies of American products such as the
Intel 3000
This generational list of Intel processors attempts to present all of Intel's processors from the pioneering 4-bit 4004 (1971) to the present high-end offerings. Concise technical data is given for each product.
Latest
13th generation Cor ...
and
DEC LSI-11/2.
"Operation Brunnhilde"
Some of these activities were directed via the
East German
East Germany, officially the German Democratic Republic (GDR; german: Deutsche Demokratische Republik, , DDR, ), was a country that existed from its creation on 7 October 1949 until its dissolution on 3 October 1990. In these years the state ...
Stasi
The Ministry for State Security, commonly known as the (),An abbreviation of . was the Intelligence agency, state security service of the East Germany from 1950 to 1990.
The Stasi's function was similar to the KGB, serving as a means of maint ...
(Ministry for State Security). One such operation, "Operation Brunnhilde," operated from the mid-1950s until early 1966 and made use of spies from many
Communist Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
countries. Through at least 20 forays, many western European industrial secrets were compromised. One member of the "Brunnhilde" ring was a
Swiss
Swiss may refer to:
* the adjectival form of Switzerland
* Swiss people
Places
* Swiss, Missouri
* Swiss, North Carolina
*Swiss, West Virginia
* Swiss, Wisconsin
Other uses
*Swiss-system tournament, in various games and sports
*Swiss Internation ...
chemical engineer
In the field of engineering, a chemical engineer is a professional, equipped with the knowledge of chemical engineering, who works principally in the chemical industry to convert basic raw materials into a variety of products and deals with the ...
, Dr. Jean Paul Soupert (also known as "Air Bubble"), living in
Brussels
Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
. He was described by
Peter Wright in
Spycatcher
''Spycatcher: The Candid Autobiography of a Senior Intelligence Officer'' (1987) is a memoir written by Peter Wright, former MI5 officer and Assistant Director, and co-author Paul Greengrass. He drew on his own experiences and research into ...
as having been "doubled" by the
Belgian
Belgian may refer to:
* Something of, or related to, Belgium
* Belgians, people from Belgium or of Belgian descent
* Languages of Belgium, languages spoken in Belgium, such as Dutch, French, and German
*Ancient Belgian language, an extinct languag ...
Sûreté de l'État. He revealed information about industrial espionage conducted by the ring, including the fact that Russian agents had obtained details of
Concorde
The Aérospatiale/BAC Concorde () is a retired Franco-British supersonic airliner jointly developed and manufactured by Sud Aviation (later Aérospatiale) and the British Aircraft Corporation (BAC).
Studies started in 1954, and France an ...
's advanced electronics system. He testified against two
Kodak
The Eastman Kodak Company (referred to simply as Kodak ) is an American public company that produces various products related to its historic basis in analogue photography. The company is headquartered in Rochester, New York, and is incorpor ...
employees, living and working in Britain, during a trial in which they were accused of passing information on industrial processes to him, though they were eventually acquitted.
According to a 2020 ''American Economic Review'' study, East German industrial espionage in West Germany significantly reduced the gap in
total factor productivity
In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. Under some simplifying assumptions about the production technology, growt ...
between the two countries.
Soviet system
A secret report from the
Military-Industrial Commission of the USSR The Military-Industrial Commission of the USSR or VPK (russian: военно-промышленная комиссия) commission under the Soviet Council of Ministers from 1957 to 1991. The VPK was a Commission of the Presidium of the Council of ...
(VPK), from 1979–80, detailed how (russian: специнформация, "special records") could be utilised in twelve different military industrial areas. Writing in the
Bulletin of the Atomic Scientists
The ''Bulletin of the Atomic Scientists'' is a nonprofit organization concerning science and global security issues resulting from accelerating technological advances that have negative consequences for humanity. The ''Bulletin'' publishes conte ...
, Philip Hanson detailed a system in which 12 industrial branch ministries formulated requests for information to aid technological development in their military programs. Acquisition plans were described as operating on 2-year and 5-year cycles with about 3000 tasks underway each year. Efforts were aimed at civilian and military industrial targets, such as in the
petrochemical industries
The petrochemical industry is concerned with the production and trade of petrochemicals. A major part is constituted by the plastics (polymer) industry. It directly interfaces with the petroleum industry, especially the downstream sector.
Compan ...
. Some information was gathered to compare Soviet technological advancement with that of their competitors. Much unclassified information was also gathered, blurring the boundary with "competitive intelligence".
The
Soviet military
The Soviet Armed Forces, the Armed Forces of the Soviet Union and as the Red Army (, Вооружённые Силы Советского Союза), were the armed forces of the Russian SFSR (1917–1922), the Soviet Union (1922–1991), and th ...
was recognised as making much better use of acquired information than civilian industries, where their record in replicating and developing industrial technology was poor.
Legacy of Cold War espionage
Following the demise of the Soviet Union and the end of the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
, commentators, including the
US Congressional Intelligence Committee, noted a redirection amongst the espionage community from military to industrial targets, with Western and former communist countries making use of "underemployed" spies and expanding programs directed at stealing such information.
The legacy of Cold War spying included not just the redirection of personnel but the use of spying apparatus such as computer databases,
scanners for eavesdropping,
spy satellites
A reconnaissance satellite or intelligence satellite (commonly, although unofficially, referred to as a spy satellite) is an Earth observation satellite or communications satellite deployed for military or intelligence applications.
Th ...
,
bugs and
wires.
Industrial espionage as part of US foreign policy
According to an article from news website theintercept.com, "potentially sabotaging another country's hi-tech industries and their top companies has long been a sanctioned American strategy." The article was based on a leaked report issued from former U.S. Director of National Intelligence
James R. Clapper
James Robert Clapper Jr. (born March 14, 1941) is a retired lieutenant general in the United States Air Force and former Director of National Intelligence. Clapper has held several key positions within the United States Intelligence Community. H ...
's office that evaluated a theoretical scenario on how intelligence could be used to overcome a loss of the United States' technological and innovative edge. The report did not show any actual occurrence of U.S. conducted industrial espionage, and when contacted the
Director of National Intelligence
The director of national intelligence (DNI) is a senior, cabinet-level United States government official, required by the Intelligence Reform and Terrorism Prevention Act of 2004 to serve as executive head of the United States Intelligence Commu ...
office responded with, "the United States—unlike our adversaries—does not steal proprietary corporate information to further private American companies' bottom lines", and that "the Intelligence Community regularly engages in analytic exercises to identify potential future global environments, and how the IC could help the United States Government respond". The report, he said, "is not intended to be, and is not, a reflection of current policy or operations".
Former CIA Director Stansfield Turner stated in 1991 "Nevertheless, as we increase emphasis on securing economic intelligence, we will have to spy on the more developed countries-our allies and friends with whom we compete economically-but to whom we turn first for political and military assistance in a crisis. This means that rather than instinctively reaching for human, on-site spying, the United States will want to look to those impersonal technical systems, primarily satellite photography and intercepts".
Former CIA Director James Woolsey acknowledged in 2000 that the United States steals economic secrets from foreign firms and their governments "with espionage, with communications, with reconnaissance satellites". He also stated it is "not to provide secrets, technological secrets to American industry." He listed the three reasons as understanding whether sanctions are functioning for countries under sanction, monitoring dual-use technology that could be used to produce or develop weapons of mass destruction, and to spy on bribery to uphold the Foreign Corrupt Practices Act.
In 2013 The United States was accused of spying on Brazilian oil company Petrobras. Brazil's President Dilma Rousseff stated that it was tantamount to industrial espionage and had no security justification.
In 2014 former US intelligence officer Edward Snowden stated that America's National Security Agency was engaged in industrial espionage and that they spied on German companies that compete with US firms. He also highlighted the fact the NSA uses mobile phone apps such as Angry Birds to gather personal data.
In September 2019, security firm Qi An Xin published report linking the CIA to a series of attacks targeting Chinese aviation agencies between 2012 and 2017.
Israel's economic espionage in the United States
Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel's sizable armaments industry.
Israel was accused by the US government of selling US military technology and secrets to China.
In 2014 American counter-intelligence officials told members of the House Judiciary and Foreign Affairs committees that Israel's current espionage activities in America are "unrivaled".
Use of computers and the Internet
Personal computers
Computers have become key in exercising industrial espionage due to the enormous amount of information they contain and the ease at which it can be copied and transmitted. The use of computers for espionage increased rapidly in the 1990s. Information has commonly been stolen by individuals posing as subsidiary workers, such as cleaners or repairmen, gaining access to unattended computers and copying information from them.
Laptop
A laptop, laptop computer, or notebook computer is a small, portable personal computer (PC) with a screen and alphanumeric keyboard. Laptops typically have a clam shell form factor with the screen mounted on the inside of the upper li ...
s were, and still are, a prime target, with those traveling abroad on business being warned not to leave them for any period of time. Perpetrators of espionage have been known to find many ways of conning unsuspecting individuals into parting, often only temporarily, from their possessions, enabling others to access and steal information. A "bag-op" refers to the use of hotel staff to access data, such as through laptops, in hotel rooms. Information may be stolen in transit, in
taxi
A taxi, also known as a taxicab or simply a cab, is a type of vehicle for hire with a driver, used by a single passenger or small group of passengers, often for a non-shared ride. A taxicab conveys passengers between locations of their choice ...
s, at airport baggage counters,
baggage carousel
A baggage carousel is a device, generally at an airport, that delivers checked luggage to the passengers at the baggage reclaim area at their final destination. Not all airports use these devices. Airports without carousels generally deliver bagg ...
s, on
train
In rail transport, a train (from Old French , from Latin , "to pull, to draw") is a series of connected vehicles that run along a railway track and Passenger train, transport people or Rail freight transport, freight. Trains are typically pul ...
s and so on.
The Internet
The rise of the Internet and computer networks has expanded the range and detail of information available and the ease of access for the purpose of industrial espionage. This type of operation is generally identified as state backed or sponsored, because the "access to personal, financial or analytic resources" identified exceed that which could be accessed by cybercriminals or individual hackers. Sensitive military or defense engineering or other industrial information may not have immediate monetary value to criminals, compared with, say, bank details. Analysis of cyberattacks suggests deep knowledge of networks, with targeted attacks, obtained by numerous individuals operating in a sustained organized way.
Opportunities for sabotage
The rising use of the internet has also extended opportunities for industrial espionage with the aim of sabotage. In the early 2000s, it was noticed that energy companies were increasingly coming under attack from hackers. Energy power systems, doing jobs like monitoring power grids or water flow, once isolated from the other computer networks, were now being connected to the internet, leaving them more vulnerable, having historically few built-in security features. The use of these methods of industrial espionage have increasingly become a concern for governments, due to potential attacks by terrorist groups or hostile foreign governments.
Malware
One of the means of perpetrators conducting industrial espionage is by exploiting vulnerabilities in computer software.
Malware
Malware (a portmanteau for ''malicious software'') is any software intentionally designed to cause disruption to a computer, server, client, or computer network, leak private information, gain unauthorized access to information or systems, depri ...
and
spyware
Spyware (a portmanteau for spying software) is software with malicious behaviour that aims to gather information about a person or organization and send it to another entity in a way that harms the user—for example, by violating their privac ...
are "tool
for industrial espionage", in "transmitting digital copies of trade secrets, customer plans, future plans and contacts". Newer forms of malware include devices which surreptitiously switch on mobile phones camera and recording devices. In attempts to tackle such attacks on their intellectual property, companies are increasingly keeping important information off network, leaving an "air gap", with some companies building
Faraday cages to shield from electromagnetic or cellphone transmissions.
Distributed denial of service (DDoS) attack
The
distributed denial of service
In computing, a denial-of-service attack (DoS attack) is a cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host connect ...
(DDoS) attack uses compromised computer systems to orchestrate a flood of requests on the target system, causing it to shut down and deny service to other users. It could potentially be used for economic or industrial espionage with the purpose of sabotage. This method was allegedly utilized by Russian secret services, over a period of two weeks on a
cyberattack
A cyberattack is any offensive maneuver that targets computer information systems, computer networks, infrastructures, or personal computer devices. An attacker is a person or process that attempts to access data, functions, or other restricted ...
on Estonia in May 2007, in response to the removal of a Soviet era war memorial.
Notable cases
British East India Company
In 1848, the
British East India Company
The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...
broke
Qing China
The Qing dynasty ( ), officially the Great Qing,, was a Manchu people, Manchu-led Dynasties in Chinese history, imperial dynasty of China and the last orthodox dynasty in Chinese history. It emerged from the Later Jin (1616–1636), La ...
's global near-
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
on tea production by smuggling Chinese tea out of the nation and copying Chinese tea-making processes. The
British Empire
The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts esta ...
had previously run a considerable trade deficit with China by importing the nation's tea and other goods. The British attempted to rectify the deficit by trading
opium
Opium (or poppy tears, scientific name: ''Lachryma papaveris'') is dried latex obtained from the seed capsules of the opium poppy ''Papaver somniferum''. Approximately 12 percent of opium is made up of the analgesic alkaloid morphine, which i ...
to the Chinese, but encountered difficulties after the
Daoguang Emperor
The Daoguang Emperor (; 16 September 1782 – 26 February 1850), also known by his temple name Emperor Xuanxong of Qing, born Mianning, was the seventh Emperor of the Qing dynasty, and the sixth Qing emperor to rule over China proper, reigning ...
banned the opium trade and the
First Opium War
The First Opium War (), also known as the Opium War or the Anglo-Sino War was a series of military engagements fought between Britain and the Qing dynasty of China between 1839 and 1842. The immediate issue was the Chinese enforcement of the ...
broke out. To avoid further issues in trading tea with China, the East India Company hired Scottish botanist
Robert Fortune
Robert Fortune (16 September 1812 – 13 April 1880) was a Scottish botanist, plant hunter and traveller, best known for introducing around 250 new ornamental plants, mainly from China, but also Japan, into the gardens of Britain, Australia, a ...
to travel to China under the guise of a Chinese nobleman and obtain Chinese trade secrets and tea plants for replanting. Infiltrating Chinese tea-making facilities, Fortune recorded the Chinese process for creating tea and smuggled tea leaves and seeds back to the East India Company. These tea plants were later introduced into
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
, helping it surpass China as the world's largest tea producer.
France and the United States
Between 1987 and 1989,
IBM and
Texas Instruments
Texas Instruments Incorporated (TI) is an American technology company headquartered in Dallas, Texas, that designs and manufactures semiconductors and various integrated circuits, which it sells to electronics designers and manufacturers globall ...
were thought to have been targeted by French
DGSE
The General Directorate for External Security (french: link=no, Direction générale de la Sécurité extérieure, DGSE) is France's foreign intelligence agency, equivalent to the British MI6 and the American CIA, established on 2 April 1982. ...
with the intention of helping France's
Groupe Bull
Bull SAS (also known as Groupe Bull, Bull Information Systems, or simply Bull) is a French computer company headquartered in Les Clayes-sous-Bois, in the western suburbs of Paris. The company has also been known at various times as Bull General El ...
. In 1993, U.S. aerospace companies were also thought to have been targeted by French interests. During the early 1990s, France was described as one of the most aggressive pursuers of espionage to garner foreign industrial and technological secrets. France accused the U.S. of attempting to sabotage its high tech industrial base. The government of France has been alleged to have conducted ongoing industrial espionage against American aerodynamics and satellite companies.
Volkswagen
In 1993, car manufacturer
Opel
Opel Automobile GmbH (), usually shortened to Opel, is a German automobile manufacturer which has been a subsidiary of Stellantis since 16 January 2021. It was owned by the American automaker General Motors from 1929 until 2017 and the PSA Grou ...
, the German division of
General Motors
The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
, accused
Volkswagen
Volkswagen (),English: , . abbreviated as VW (), is a German Automotive industry, motor vehicle manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Founded in 1937 by the German Labour Front under the Nazi Party and revived into a ...
of industrial espionage after Opel's chief of production, Jose Ignacio Lopez, and seven other executives moved to Volkswagen. Volkswagen subsequently threatened to sue for defamation, resulting in a four-year legal battle. The case, which was finally settled in 1997, resulted in one of the largest settlements in the history of industrial espionage, with Volkswagen agreeing to pay General Motors $100 million and to buy at least $1 billion of car parts from the company over 7 years, although it did not explicitly apologize for Lopez's behavior.
Hilton and Starwood
In April 2009,
Starwood
Starwood Hotels and Resorts Worldwide, Inc. was one of the largest companies that owned, operated, franchised and managed hotels, resorts, spas, residences, and vacation ownership properties. It was acquired by Marriott International in 2016.
...
accused its rival
Hilton Worldwide
Hilton Worldwide (legally Hilton Worldwide Holdings Inc.) is an American multinational hospitality company that manages and franchises a broad portfolio of hotels and resorts. Founded by Conrad Hilton in May 1919, the corporation is now led b ...
of a "massive" case of industrial espionage. After being acquired by
The Blackstone Group
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate bu ...
, Hilton employed 10 managers and executives from Starwood. Starwood accused Hilton of stealing corporate information relating to its luxury brand concepts, used in setting up its Denizen hotels. Specifically, former head of its
luxury brands
In economics, a luxury good (or upmarket good) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a greater proportion of overall spending. Luxury goods are in contrast to n ...
group, Ron Klein, was accused of downloading "truckloads of documents" from a laptop to his personal email account.
Google and Operation Aurora
On 13 January 2010,
Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
announced that operators, from within China, had hacked into their Google China operation, stealing intellectual property and, in particular, accessing the email accounts of human rights activists. The attack was thought to have been part of a more widespread cyber attack on companies within China which has become known as
Operation Aurora
Operation Aurora was a series of cyber attacks conducted by advanced persistent threats such as the Elderwood Group based in Beijing, China, with ties to the People's Liberation Army. First publicly disclosed by Google on January 12, 2010, in a ...
. Intruders were thought to have launched a
zero-day attack
A zero-day (also known as a 0-day) is a computer-software vulnerability previously unknown to those who should be interested in its mitigation, like the vendor of the target software. Until the vulnerability is mitigated, hackers can exploit ...
, exploiting a weakness in the
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
Internet Explorer
Internet Explorer (formerly Microsoft Internet Explorer and Windows Internet Explorer, commonly abbreviated IE or MSIE) is a series of graphical user interface, graphical web browsers developed by Microsoft which was used in the Microsoft Wind ...
browser, the malware used being a modification of the
trojan
Trojan or Trojans may refer to:
* Of or from the ancient city of Troy
* Trojan language, the language of the historical Trojans
Arts and entertainment Music
* ''Les Troyens'' ('The Trojans'), an opera by Berlioz, premiered part 1863, part 189 ...
"Hydraq". Concerned about the possibility of hackers taking advantage of this previously unknown weakness in Internet Explorer, the governments of Germany and, subsequently France, issued warnings not to use the browser.
There was speculation that "insiders" had been involved in the attack, with some Google China employees being denied access to the company's internal networks after the company's announcement. In February 2010, computer experts from the U.S.
National Security Agency
The National Security Agency (NSA) is a national-level intelligence agency of the United States Department of Defense, under the authority of the Director of National Intelligence (DNI). The NSA is responsible for global monitoring, collecti ...
claimed that the attacks on Google probably originated from two Chinese universities associated with expertise in computer science,
Shanghai Jiao Tong University
Shanghai Jiao Tong University (SJTU; ) is a public research university in Shanghai, China. The university is funded by the Ministry of Education of China.
The university was established on April 8, 1896 as Nanyang Public School (南洋 ...
and the
Shandong Lanxiang Vocational School
The Shandong Lanxiang Vocational School (), colloquially Lanxiang (), is a vocational school in the Tianqiao District of Jinan, Shandong, China.
The school was founded in 1984 and is said to have been established with support from the People's ...
, the latter having close links to the
Chinese military.
Google claimed at least 20 other companies had also been targeted in the cyber attack, said by the ''London
Times
Time is the continued sequence of existence and events, and a fundamental quantity of measuring systems.
Time or times may also refer to:
Temporal measurement
* Time in physics, defined by its measurement
* Time standard, civil time specific ...
'', to have been part of an "ambitious and sophisticated attempt to steal secrets from unwitting corporate victims" including "defence contractors, finance and technology companies". Rather than being the work of individuals or organised criminals, the level of sophistication of the attack was thought to have been "more typical of a nation state". Some commentators speculated as to whether the attack was part of what is thought to be a concerted Chinese industrial espionage operation aimed at getting "high-tech information to jump-start China's economy". Critics pointed to what was alleged to be a lax attitude to the intellectual property of foreign businesses in China, letting them operate but then seeking to copy or
reverse engineer
Reverse engineering (also known as backwards engineering or back engineering) is a process or method through which one attempts to understand through deductive reasoning how a previously made device, process, system, or piece of software accompli ...
their technology for the benefit of Chinese "national champions". In Google's case, they may have (also) been concerned about the possible misappropriation of source code or other technology for the benefit of Chinese rival
Baidu
Baidu, Inc. ( ; , meaning "hundred times") is a Chinese multinational technology company specializing in Internet-related services and products and artificial intelligence (AI), headquartered in Beijing's Haidian District. It is one of the la ...
. In March 2010 Google subsequently decided to cease offering censored results in China, leading to the closing of its Chinese operation.
''USA v. Lan Lee, et al.''
The United States charged two former
NetLogic Inc. engineers, Lan Lee and Yuefei Ge, of committing economic espionage against TSMC and NetLogic, Inc. A jury acquitted the defendants of the charges with regard to TSMC and deadlocked on the charges with regard to NetLogic. In May 2010, a federal judge dismissed all the espionage charges against the two defendants. The judge ruled that the U.S. government presented no evidence of espionage.
Dongxiao Yue and Chordiant Software, Inc.
In May 2010, the federal jury convicted
Chordiant
Chordiant, formerly known as Chordiant Software and J. Frank Consulting, was an American software company which offered enterprise software to help other companies improve customer experience. Now owned by Pegasystems, they were headquartered in ...
Software, Inc., a U.S. corporation, of stealing Dongxiao Yue's JRPC technologies and used them in a product called Chordiant Marketing Director. Yue previously filed lawsuits against
Symantec Corporation
Gen Digital Inc. (formerly Symantec Corporation and NortonLifeLock) is a multinational software company co-headquartered in Tempe, Arizona and Prague, Czech Republic. The company provides cybersecurity software and services. Gen is a Fortune 50 ...
for a similar theft.
Concerns of national governments
Brazil
Revelations from the Snowden documents have provided information to the effect that the United States, notably vis-à-vis the NSA, has been conducting aggressive economic espionage against
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
. Canadian intelligence has apparently supported U.S. economic espionage efforts.
China
The Chinese cybersecurity company Qihoo 360 accused Central Intelligence Agency of the United States of an 11-year-long hacking campaign that targeted several industries including aviation organizations, scientific research institutions, petroleum firms, internet companies, and government agencies.
United States
A 2009 report to the US government, by aerospace and defense company
Northrop Grumman
Northrop Grumman Corporation is an American multinational aerospace and defense technology company. With 90,000 employees and an annual revenue in excess of $30 billion, it is one of the world's largest weapons manufacturers and military techn ...
, describes Chinese economic espionage as comprising "the single greatest threat to U.S. technology". Blogging on
the 2009 cyber attack on Google, Joe Stewart of
SecureWorks referred to a "persistent campaign of 'espionage-by-malware' emanating from the People's Republic of China (PRC)" with both corporate and state secrets being "Shanghaied" over the past 5 or 6 years. The Northrop Grumman report states that the collection of US defense engineering data through cyberattack is regarded as having "saved the recipient of the information years of R&D and significant amounts of funding". Concerns about the extent of cyberattacks on the US emanating from China has led to the situation being described as the dawn of a "new cold cyberwar".
According to
Edward Snowden
Edward Joseph Snowden (born June 21, 1983) is an American and naturalized Russian former computer intelligence consultant who leaked highly classified information from the National Security Agency (NSA) in 2013, when he was an employee and su ...
, the
National Security Agency
The National Security Agency (NSA) is a national-level intelligence agency of the United States Department of Defense, under the authority of the Director of National Intelligence (DNI). The NSA is responsible for global monitoring, collecti ...
spies on foreign companies. In June 2015 Wikileaks published documents about the National Security Agency spying on French companies.
United Kingdom
During December of 2007, this was suddenly revealed that Jonathan Evans, head of the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
's
MI5
The Security Service, also known as MI5 ( Military Intelligence, Section 5), is the United Kingdom's domestic counter-intelligence and security agency and is part of its intelligence machinery alongside the Secret Intelligence Service (MI6), G ...
, had sent out confidential letters to 300 chief executives and security chiefs at the country's banks, accountants and legal firms warning of attacks from Chinese 'state organisations'. A summary was also posted on the secure website of the Centre for the Protection of the National Infrastructure, accessed by some of the nation's 'critical infrastructure' companies, including 'telecoms firms, banks and water and electricity companies'. One security expert warned about the use of 'custom
trojans
Trojan or Trojans may refer to:
* Of or from the ancient city of Troy
* Trojan language, the language of the historical Trojans
Arts and entertainment Music
* ''Les Troyens'' ('The Trojans'), an opera by Berlioz, premiered part 1863, part 1890 ...
,' software specifically designed to hack into a particular firm and feed back data. Whilst China was identified as the country most active in the use of internet spying, up to 120 other countries were said to be using similar techniques. The Chinese government responded to UK accusations of economic espionage by saying that the report of such activities was 'slanderous' and that the government opposed hacking which is prohibited by law.
Germany
German counter-intelligence experts have maintained the German economy is losing around €53 billion or the equivalent of 30,000 jobs to economic espionage yearly.
In
Operation Eikonal
Operation Eikonal is a collaboration between the National Security Agency (NSA) and ''Bundesnachrichtendienst'' (BND) for the sharing of telephony and internet data captured in Germany. It is based on an agreement that dates to 2002, and is part of ...
, German
BND agents received "selector lists" from the
NSA
The National Security Agency (NSA) is a national-level intelligence agency of the United States Department of Defense, under the authority of the Director of National Intelligence (DNI). The NSA is responsible for global monitoring, collecti ...
– search terms for their dragnet surveillance. They contain IP addresses, mobile phone numbers and email accounts with the BND surveillance system containing hundreds of thousands and possibly more than a million such targets.
These lists have been subject of controversy as in 2008 it was revealed that they contained some terms targeting the
European Aeronautic Defence and Space Company
Airbus SE (; ; ; ) is a European multinational aerospace corporation. Airbus designs, manufactures and sells civil and military aerospace products worldwide and manufactures aircraft throughout the world. The company has three divisions: '' ...
(EADS), the
Eurocopter
Airbus Helicopters SAS (formerly Eurocopter Group) is the helicopter manufacturing division of Airbus. It is the largest in the industry in terms of revenues and turbine helicopter deliveries. Its head office is located at Marseille Provence Ai ...
project
as well as French administration,
which were first noticed by BND employees in 2005.
After the revelations made by whistleblower Edward Snowden, the BND decided to investigate the issue whose October 2013 conclusion was that at least 2,000 of these selectors were aimed at Western European or even German interests which has been a violation of the Memorandum of Agreement that the US and Germany signed in 2002 in the wake of the
9/11 terror attacks
The September 11 attacks, commonly known as 9/11, were four coordinated Suicide attack, suicide List of terrorist incidents, terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, ...
.
After reports emerged in 2014 that EADS and Eurocopter had been surveillance targets the
Left Party and the
Greens filed an official request to obtain evidence of the violations.
The BND's project group charged with supporting the
NSA investigative committee in German parliament set up in spring 2014, reviewed the selectors and discovered 40,000 suspicious search parameters, including espionage targets in Western European governments and numerous companies. The group also confirmed suspicions that the NSA had systematically violated German interests and concluded that the Americans could have perpetrated
economic espionage
Industrial espionage, economic espionage, corporate spying, or corporate espionage is a form of espionage conducted for commercial purposes instead of purely national security.
While political espionage is conducted or orchestrated by governme ...
directly under the Germans' noses.
The investigative parliamentary committee was not granted access to the NSA's selectors list as an appeal led by opposition politicians failed at Germany's top court. Instead the ruling coalition appointed an administrative judge, , as a "person of trust" who was granted access to the list and briefed the investigative commission on its contents after analyzing the 40,000 parameters. In his almost 300-paged report Graulich concluded that European government agencies were targeted massively and that Americans hence broke contractual agreements. He also found that German targets which received special protection from surveillance of domestic intelligence agencies by
Germany's Basic Law (Grundgesetz) − including numerous enterprises based in Germany – were featured in the NSA's wishlist in a surprising plenitude.
Competitive intelligence and economic or industrial espionage
"
Competitive intelligence
Competitive intelligence (CI) is the process and forward-looking practices used in producing knowledge about the competitive environment to improve organizational performance. It involves the systematic collection and analysis of information from ...
" involves the legal and ethical activity of systematically gathering, analyzing and managing information on industrial competitors. It may include activities such as examining newspaper articles, corporate publications, websites, patent filings, specialised databases, information at trade shows and the like to determine information on a corporation. The compilation of these crucial elements is sometimes termed CIS or CRS, a ''Competitive Intelligence Solution'' or ''Competitive Response Solution'', with its roots in
market research
Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...
. Douglas Bernhardt has characterised "competitive intelligence" as involving "the application of principles and practices from military and national intelligence to the domain of global business"; it is the commercial equivalent of
open-source intelligence
Open-source intelligence (OSINT) is the collection and analysis of data gathered from open sources (covert and publicly available sources) to produce actionable intelligence. OSINT is primarily used in national security, law enforcement, and busi ...
.
The difference between competitive intelligence and economic or industrial espionage is not clear; one needs to understand the legal basics to recognize how to draw the line between the two.
[
]
See also
*
American Economic Espionage Act of 1996
*
Business intelligence
Business intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis and management of business information. Common functions of business intelligence technologies include reporting, online analytical pr ...
*
Corporate warfare
Corporate warfare is a form of information warfare in which attacks on companies by other companies take place. Such warfare may be part of economic warfare and cyberwarfare; but can involve espionage, 'dirty' PR tactics, or physical theft. The i ...
*
Cyber spying
Cyber spying, or cyber espionage, is the act or practice of obtaining secrets and information without the permission and knowledge of the holder of the information from individuals, competitors, rivals, groups, governments and enemies for personal, ...
*
FBI
The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
*
*
History of tea in India
India is one of the largest tea producers in the world, although over 70 per cent of its tea is consumed within India itself. A number of renowned teas, such as Assam and Darjeeling, also grow exclusively in India. The Indian tea industry has gro ...
*
Labor spying in the United States
Labor spying in the United States had involved people recruited or employed for the purpose of gathering intelligence, committing sabotage, sowing dissent, or engaging in other similar activities, in the context of an employer/labor organization r ...
Notes
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{{DEFAULTSORT:Industrial Espionage
Cyberwarfare
Types of espionage
Corporate crime
Trade secrets
Cyberpunk themes
Security breaches