Privacy and the Private Eye

Q. Is it permissible to spy on business competitors to gain an advantage in the fight for customers?

A. The absolutely outrageous case of corporate spying recently unveiled in Israel aroused not only outrage but also a lot of serious consideration of where exactly we do draw the line between legitimate "competitive intelligence" and forbidden "industrial espionage".

Of course there is nothing wrong with trying to learn from our competitors. Indeed, the process of mutual learning and copying is one of the principal ways a free market leads to constant improvement in the level of service. But we do have an obligation to respect the efforts of others, including competitors, to keep certain information under wraps.

Many people are familiar with the "ban of Rabbeinu Gershom," a 1000-year-old decree which forbids the reading of discarded mail. But the eminent authority Rabbi Yaakov Chagiz explains that the prohibition on seeking out the secrets of our fellow man is actually found in the Torah itself. The Torah tells us, "Don't go as a talebearer among your people". (Leviticus 19:16.) This verse warns us that if we have private information on someone which he prefers to keep hidden, we shouldn't go about revealing it to others. Rabbi Chagiz asks, what difference does it make if I know the information and reveal it to others, or if I don't know the information and I reveal it to myself? (1) Either way I have willfully added to the number of people who are appraised of the secret.

Strengthening the applicability of this verse to industrial espionage, Rashi explains here that the word for "talebearer" is cognate with the word for "spying." The talebearer is a kind of domestic spy.

Of course beyond the spying itself we need to examine the motive of the spying: to obtain a competitive advantage. While Jewish tradition doesn't shun competition, it does regulate it and forbids obtaining an unfair advantage. While it is perfectly legitimate for each of two firms to invest in ways to improve service or lower prices, it is unfair for one firm to take advantage of the investment of the other. The example given in the Talmud is where one fisherman spreads bait in order to attract fish, and a competing fisherman comes to fish in that exact location. (2) Any advantage due to that location is only because of the efforts of the first, and so this crosses the line into unfair competition.

This exactly describes much of the spying which took place in the recent case. The victimized companies invested immense efforts in compiling customer lists, public relations campaigns, tender bids and the like; the competitors then stole this information and used it to their own advantage.

An additional, and very important, ethical lapse in the recent case was the efforts of some of the companies to evade responsibility and claim that any wrongdoing was the responsibility of the private investigators who actually engaged in spying. A basic principle of Jewish ethics is that a person who induces another to engage in wrongdoing bears some of the responsibility. The Mishnah tells us that a person shouldn't sell diluted wine to a merchant even if the merchant himself is informed, as this will create a temptation for him to sell this wine to his customers. (3) By the same token, adopting a "don't ask, don't tell" attitude towards a private investigator is clearly an invitation to unethical behavior. The refusal to take responsibility in this case was particularly blameworthy since the quality of the intelligence was clearly beyond what was obtainable through legitimate means. This went beyond "don't ask don't tell" and crossed the line into virtually certain knowledge of wrongdoing.

SOURCES: (1) Halakhot Ketanot 1:276. (2) Babylonian Talmud Bava Batra 21b. (3) Mishnah Bava Metzia end of chapter 4.