Sunday, July 25th, 2010

Walking the Line of Competitive Intelligence

by Kelly Klatt

In previous posts we have talked about how economic espionage effected Apple with their release of the iPhone 4 and some different ways to lower the risks of economic espionage.  A big part of running a business is gathering competitive intelligence on what other companies in your industry are doing, but at what point does competitive intelligence become economic espionage.  As we have said, the later is illegal and gathering competitive intelligence can become a federal offense that sends you to prison with fines.

Gathering competitive intelligence, if done by legal means like the internet, is OK if the information you are gathering is public.  Competitive intelligence doesn’t have to be information that is secret, there is a lot of information that is available to the public that no one is paying attention to.

So what is the difference that turns competitive intelligence into economic espionage?  There are two types of competitive information, material and non material.  Non material information doesn’t really fall into the realm of competitive intelligence. You can’t use non material competitive intelligence to enhance your business, or effect the business you are gathering competitive intelligence on.

Once you have determined that the competitive intelligence you are gathering is material, the part that makes it legal is whether the information is public or non public. You can determine this by checking the source of your competitive intelligence and then trying to verify the information from another source. If you can’t verify the information publicly, your competitive intelligence may fall under the jurisdiction of economic espionage.

We caution security consultants to warn their clients of the risks on both sides of this coin. If you are the company that is gathering the competitive intelligence, a wrong step can ruin the reputation of your company.  From the security side, a security advisor can build a plan for your company to protect the risks of competitive intelligence gathering and help you avoid the fallout that can occur from leaks in your castle walls.  While we hope that the world doesn’t become a place that needs intelligence protection for corporations, we feel its best to build protections up front to avoid the temptation.

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