The rivalry between Coca-Cola and Pepsi is regarded as one of the fiercest in the history of business.
The two soft drink makers are giants in their own right, and have been spurred on by each others’ high standards in their decades long rivalry.
Their history is full of highs and lows, such as the disastrous “New Coke” idea of the 1980s.
Pepsi has its own strange stories to tell, like when it had its own navy, and when it was sued by Michael Jackson after the singer was badly burned.
While fierce, the feud has rarely descended into cheap shots and dirty tricks, which is how three Coca-Cola employees ended up in jail.
Their great brainwave was to steal Coke’s famous secret recipe and sell it to Pepsi.
However, Pepsi was having none of it.
Here’s what happened.
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How the Plot Unfolded
The plan, hatched in 2006, involved Joya Williams, a Coca-Cola executive assistant who access to sensitive company information. She teamed up with two others, Ibrahim Dimson and Edmund Duhaney, to steal classified documents and trade secrets.
They planned to sell the confidential documents to Pepsi.
As well as the original recipe, they planned to sell information about new products. To prove they were legitimate, they sent samples of stolen documents.
Instead of embracing a chance to potentially put their rivals out of business, Pepsi went in another direction – to the FBI. The company alerted Coca-Cola about the offer and handed the matter over to the FBI.
The Sting Operation
In coordination with Pepsi, the FBI launched an undercover investigation.
Agents posed as Pepsi representatives and arranged meetings with the conspirators. During one of these meetings, Dimson handed over a Coca-Cola document in exchange for $30,000. This was meant to be a down payment, with the promise of more secrets to come.
That transaction sealed their fate. The exchange was caught on tape, all three were arrested soon after.
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Sentences and Legal Fallout
Once the case went to trial, the three conspirators faced serious consequences:
- Joya Williams was sentenced to 8 years in prison.
- Ibrahim Dimson received a 5-year sentence.
- Edmund Duhaney was sentenced to 2 years.
Coca-Cola publicly praised Pepsi for its honesty and for bringing the matter to their attention.
A statement said:
“We are grateful for PepsiCo’s cooperation in bringing this matter to our attention and for their assistance throughout this investigation.”
The attempted theft highlighted just how valuable Coca-Cola’s trade secrets are, especially its iconic formula, which has been a mystery for over a century.
It also highlighted a clear drive within Pepsi to not take the easy way out and to continue to move forward without resorting to dirty tricks.
The Economic Espionage Act 1996
It’s also worth pointing out Pepsi would’ve found itself in big trouble had it gone along with the thieves, as selling trade secrets is deemed to be corporate espionage.
Specifically, trade secrets are protected by the Economic Espionage Act of 1996 in the United States.
This law makes it a federal crime to steal, sell, or use trade secrets without permission.
If Pepsi had knowingly bought stolen information, it could have faced serious legal consequences, including:
- Criminal Charges: Pepsi would have been complicit in the theft of trade secrets. Executives or employees involved in the purchase could have faced fines and imprisonment.
- Civil Lawsuits: Coca-Cola could have sued Pepsi for damages, including lost profits and any other financial harm caused by the theft.
So going to the FBI was a wise decision, saving huge reputational damage, jail time and millions, if not billions, in lawsuits.
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Corporate Espionage: A Cautionary Tale
This case serves as a stark reminder of the lengths some will go to profit from corporate espionage. For Coca-Cola, it also reinforced the importance of safeguarding proprietary information. The incident could have had serious financial implications if not for Pepsi’s integrity and swift action.
Ultimately, the story reflects how even in fierce corporate competition, ethical decisions still hold value.
