Procter & Gamble vs Unilever: A Case of Corporate Espionage

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Excerpts

The history of corporate/industrial espionage probably dates back to the sixth century when Justinian, the Byzantine emperor hired two monks to visit China.He wanted them to gain an understanding of silk production in China and to smuggle silkworm eggs and mulberry seeds out of that country to break its worldwide monopoly on silk production. The monks smuggled these eggs and seeds out of China in hollow bamboo walking sticks. Subsequently, in a few years the Byzantine empire replaced China as the largest silk producer in the world. Over the centuries, industrial espionage practices continued to play a major part in the development of many countries. In the 18th century, alarmed by the industrial and military supremacy of Great Britain, France sent its spies to steal the latter's industrial secrets......

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Unilever, which entered the US in late 19th century, was one of the largest foreign multinationals in the country. It competed directly with market leader P&G in many segments of the household and personal care products markets.Over the decades, the rivalry between these two companies kept on intensifying as both of them expanded to the major markets in the world. In the early 21st century, while P&G dominated the US household and personal care market, Unilever dominated the European household and personal care market. ....

In late 2000, CI executives at P&G hired an independent contractor to spy on the company's competitors (especially Unilever) in the hair care business. This independent contractor in turn hired many sub-contractors to perform this secret operation. The operation was managed from a 'safe house' called 'Ranch' in Cincinnati, P&G's hometown.Since late 2000, the agents of these sub-contractors, which P&G later called rogue operators (espionage agents), collected extensive information on Unilever's hair care business in the US....

CI experts state that 90% of the information on any company is available in the public domain, if the investigators know what and where to look for. Given this, P&G's approach towards CI was heavily criticized.Fuld said, "If the company had applied true CI, it would have never found its way into the press in the first place." Interestingly, analysts even blamed Unilever for being negligent about protecting its confidential information. ...

Exhibit I: P&G - Company Profile
Exhibit II: Unilever - Company Profile
Exhibit III: Steps in a Typical CI Exercise
Exhibit IV: Key Information Targeted by Corporate Spies
Exhibit V: A Few Well Known Cases of Corporate Espionage
Exhibit VI: Common Espionage Strategies, Legal Help & Prevention Techniques
Exhibit VII: Some Additional Preventive Measures