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6 Times Businesses Spied On And Stole From Each Other
https://www.whatjobs.com/news/business-crime-and-fraud/6-times-businesses-spied-on-and-stole-from-each-other
By Hugh Fort in Crime and Fraud, posted October 28, 2024
Corporate Espionage is a grand term used to describe when businesses spy on and steal from their rivals.
It's a serious crime that can lead to massive fines and prison sentences.
One famous example saw Coca-Cola employees try to sell the iconic secret recipe to its rival Pepsi.
In this instance, Pepsi showed some morals and the instigators ended up dealing with the FBI and going to prison.
However, there have been other instances where companies haven't been so noble, and employed dubious practices to try to steal ideas from their rivals.
Here are six notable cases where companies or people were caught in the act.
Google vs. Uber: The Self-Driving Car Theft
In 2017, Google’s self-driving car division, Waymo, accused Uber of stealing its trade secrets.
Anthony Levandowski, a former Google engineer, allegedly downloaded thousands of confidential files before leaving to start his own self-driving truck company, Otto.
Uber later acquired Otto, which intensified the legal battle.
Outcome: The lawsuit between the two businesses was settled in 2018, with Uber agreeing to pay Waymo $245 million in equity. Levandowski was sentenced to 18 months in prison.
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DuPont and the Theft of Kevlar Secrets
In 2010, DuPont sued Kolon Industries, a South Korean company, for allegedly stealing trade secrets related to Kevlar, the material used in bulletproof vests.
A former DuPont employee had passed confidential information to Kolon, allowing the company to develop a competing product.
Outcome: In 2011, a jury awarded DuPont $919 million in damages. Kolon also faced a ban on producing materials that infringed on DuPont’s trade secrets.
Tesla vs. Zoox and Rivian: Employee Poaching and Data Theft
In 2019, Tesla sued Zoox, a self-driving startup, for stealing confidential documents.
Four former Tesla employees were accused of transferring trade secrets, including warehouse and inventory software, to Zoox before switching jobs. In a separate case, Tesla also sued Rivian, an electric vehicle competitor, for poaching employees and encouraging them to steal trade secrets.
Outcome: Zoox settled with Tesla in 2020, agreeing to pay an undisclosed amount and admitting to the wrongdoing. The Rivian case is still ongoing.
Intel vs. AMD: Microchip Sabotage
In 1995, Intel accused a former employee, Avtar S. Toor, of stealing information related to its Pentium processors. Toor had moved to Advanced Micro Devices (AMD), Intel’s rival, and allegedly took with him thousands of sensitive documents. The case stirred major tensions in the semiconductor industry.
Outcome: Toor was sentenced to two years in prison and fined $25,000 for stealing trade secrets.
GlaxoSmithKline and Chinese Espionage
In 2016, GlaxoSmithKline (GSK), a global pharmaceutical company, was the target of a major espionage case. Two former GSK scientists were accused of stealing confidential information about biopharmaceuticals to benefit a Chinese company they had founded.
The stolen data involved treatments for rare diseases and cost GSK millions in research.
Outcome: Four people admitted being involved in the scam, three are awaiting sentence and one is thought to be on the run in China.
Boeing vs. Lockheed Martin: The Rocket Secrets Scandal
In 2003, Boeing was found guilty of stealing more than 25,000 confidential documents from Lockheed Martin related to rocket-launch technology. The stolen documents gave Boeing an unfair advantage in securing contracts with the U.S. Air Force.
Outcome: Boeing was fined $615 million in 2006 for its involvement in the espionage, and the case led to a significant shakeup in aerospace businesses.
The Price of Espionage: A Risk Too Great
Business is a cut-throat, ruthless world, which means corporate espionage may seem like a shortcut to success.
The major issue is that people trying to copy or sell secrets tend to get caught.
The legal and financial risks far outweigh the potential benefits for businesses.
hese cases show, companies involved in espionage can face enormous fines, loss of reputation, and even criminal charges for executives and employees.
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