Q. In a recent column you condemned prying into the private information of competitors. My business rivals didn't read your column, what steps can I take to protect myself?
A. Just as there is a burgeoning field of "competitive intelligence," we are witnessing equally robust growth in the complementary area of "competitive counterintelligence." One aspect of this field is safeguarding sensitive information, which is certainly proper. But another prominent element in effective counterintelligence is disinformation, designed to make life difficult for competitors and to keep them guessing. This aspect raises some interesting ethical questions. Let's examine the various manifestations of the disinformation business.
The easiest situation ethically is where you are only misleading a prying rival who is already acting unethically. Worried your competitor has a "mole" in one of the print shops? Why not print a package for a blockbuster non-existent product to give them something to worry about? Think your computer may be "bugged"? Be sure to fill it with clearly labeled but bogus customer lists, business plans, and so on.
This does not fall into the category of forbidden deceit, or geneivat da'at. As Rabbi Aaron Levine writes of a comparable situation in Case Studies in Jewish Business Ethics, "The geneivat da'at issue for the case at hand can be dismissed… This interdict prohibits making use of false impressions to secure something that one is otherwise not entitled to." (1) But you are perfectly entitled to keep your packaging plans and customers lists secret.
A somewhat more complex situation is where the competitor is doing nothing wrong, but even so you take proactive steps to keep him off track. Perhaps only 60% of your new manufacturing facility is actually in use; the extra space is meant to intimidate potential competitors. Why not build and staff a bogus laboratory to convince others that you have a high-powered research and development initiative? Here also, you have no obligation to your competitors to provide accurate information. There is no relationship of reciprocity, so you are again not securing something you are not entitled to.
We cross the ethical line when we create obligations, or when we improperly involve innocent bystanders. For example, competitors are very often partners. This is the nature of business, that firms in the same industry have many common interests. Large firms occasionally invite their competitors to make carefully chaperoned visits in their plants, just as nations allow a limited number of foreign military attaches and observers during maneuvers. It would not be appropriate to give your competitors a tour of a bogus plant; this is a classic case of geneivat da'at where a person thinks you have done him a favor but in fact you have only pursued your own interest.
Innocent bystanders can be involved in a number of ways. One common trick in the disinformation business is to publish "help wanted" ads to trick competitors into thinking that your business is growing. There's nothing wrong with hoodwinking your business adversaries in this way, but the poor job applicant is being misled into thinking that he really has a chance at a job. This transgresses the onaat devarim prohibition, which according to the Mishnah forbids raising hopes in vain, for instance by asking a seller for prices when you're not really interested in buying. (2)
A parallel case would be to convene a focus group of volunteer consumers to evaluate a product that you really have no interest in marketing; they agree only because they think you value their input. You could get around this problem by offering a small inducement to participants, which in any case is customary nowadays.
When Avshalom rebelled against his father King David, David protected himself by a campaign of disinformation sending Hushai the Archite to Avshalom to give a false impression of the strength of David's camp (II Samuel chapter 15-17). Business is not exactly war, but it also true that you don't owe anybody free access to your business secrets, and you can take reasonable steps to keep your rivals guessing. But we need to draw the line when we have created expectations of reciprocity, or when we mislead rivals at the expense of uninvolved bystanders.
SOURCES: (1) Rabbi Aaron Levine, Case Studies in Jewish Business Ethics p. 329. Italics in original. See also Shulchan Arukh Choshen Mishpat chapter 228. (2) Mishnah Bava Metzia, end of chapter 4.
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