Survey Finds Widespread Spying by Indian Companies

June 19, 2012, 7:10 am

By SRUTHI GOTTIPATI

http://india.blogs.nytimes.com/2012/06/19/survey-finds-widespread-spying-by-indian-companies/

The Associated Chambers of Commerce and Industry of India, known by the zingy acronym Assocham, usually releases statements on sober topics like RBI’s midterm credit policy review or industrial production figures. But last week it released a survey on corporate espionage.

“Over 35 percent of companies operating in various sectors across India are engaged in corporate espionage to gain advantage over their competitors and are even spying on their employees via social networking Web sites,” Assocham said in its report.

While checking out people’s activity on social media sites like LinkedIn or Twitter didn’t sound too alarming, Assocham made a stronger claim that about 900 respondents said that they plant a mole in other companies, usually as receptionists, photo-copiers and other low-end jobs.

“Assocham had learned about certain unconfirmed reports of prevalence of corporate espionage from many of its members which prompted us to carry out a survey to ascertain if it really was the case,” a spokesperson for the group told India Ink, asking not to be identified because of association policy.

Assocham said it conducted the “covert” survey by meeting about 1,500 corporate executives in five major cities and roughly 200 private eye agencies and trained sleuths.

Detectives said demand from companies in sectors such as information technology, infrastructure, insurance, banking and manufacturing, is overwhelming, according to D.S. Rawat, secretary general of Assocham.

“Almost all the company representatives in these domains acknowledged the prevalence of industrial espionage to gain access to information and steal trade secrets of their competitors through private deals with sleuths and spy agencies,” the survey notes, although it does not name any companies or cite specific examples.

That’s not all. About 1,200 respondents said they use detectives and surveillance agencies to constantly monitor their employees’ activities and whereabouts, using moles and social media, according to the survey.

Many detectives say that companies working with strong labor unions hire spy agencies and plant undercover agents to monitor union leaders to ensure they were not getting paid by competitors, politicians or others to create trouble, according to the report.

“About a quarter of respondents said they have hired computer experts for installing monitoring software to hack and crack the networks, track e-mails of their rivals and perform other covert activities,” Assocham notes.

Not surprisingly, the findings have been met with skepticism.

“It sounds far-fetched to me,” said Harminder Sahni, the founder and managing director of Wazir Advisors, a management consulting firm.

Mr. Sahni acknowledged, however, that companies carry out thorough background checks and also indulge in more nefarious “spying” activities when hiring senior executives. Some companies ask headhunters to interview specific people as a ruse to get them to reveal strategies of their existing employers. Or they may get “mystery vendors” to meet employees to gauge how workers behave toward outsiders– sort of like the “mystery shoppers” used by some retail businesses.

According to the survey, respondents also said they install “spying gadgets” like close-circuit television cameras, audio and video surveillance devices, voice-recorders, and global positioning systems, in their offices to keep track of employees.

Assocham says that these gadgets are a 45 billion rupee industry in India, or $807 million, and demand has been rising about 30 percent a year.