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1/25/2007
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Alexander Wolfe
Alexander Wolfe
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HP Spy Charges Put PC Hacking In Perspective

Thoughts of security breaches typically focus on hacking, but that stuff is small potatoes when compared to the big kahuna of unauthorized access: corporate spying.

Thoughts of security breaches typically focus on hacking, but that stuff is small potatoes when compared to the big kahuna of unauthorized access: corporate spying.Where's the glory in stealing a few million credit card numbers when you can get the goods on a competitor's new-product plans.

That's the charge that's flying around in a lawsuit involving HP's former VP of business development, Karl Kamb Jr. The original legal action began in November 2005, when HP sued Kamb, charging him with trying to start a company while he was working for HP.

The corporate spying allegations surfaced in a counterclaim filed by Kamb last Friday. (CNET broke the story, but I'll quote directly from Kamb's filing, which I obtained via Pacer.) In the court document, Kamb alleges the following:

"In 2002, HP became concerned about Dell's entry into the printer business…Because of its concerns, HP was interested in obtaining information regarding Dell's products, business strategies and models, cost structure, product development, manufacturing, and marketing, among other things.

"Accordingly, personnel within HP's Imaging and Printing Group's Competitive Intelligence Team instructed Kamb to make contact with individuals who had knowledge regarding Dell's plans to enter the printer market, in order to gather information regarding Dell's plans."

Pretty mild stuff, so far, right? What's wrong with having a "competitive intelligence" department? Heck, what do tech journalists write about for a living? But here's where Kamb's charges get ugly. He alleges that HP offered Katsumi Iizuka, the former president of Dell Japan, a monthly stipend to act as a "competitive analyst" for HP, in exchange for information. (Everyone wants information.)

Furthermore:

"Payments were to be processed by a third party data consolidator who would act both as a payment facilitator and as a collector and translator of secret information. Upon information and belief, those payments were approved by senior HP management. In an effort to conceal HP's clandestine activities, code names were assigned to the Dell data collection project."

For the record, HP told CNET that Kamb's counterclaims are without merit. I can't tell whether HP has responded to the court yet; HP has filed at least two subsequent motions, but they're under seal, so it's not clear whether they're procedural (which is what they seem to be from their titles) or whether they relate direcly to the counterclaims.

[Update, Jan. 25, 5 p.m.; U.S. District Judge Michael Schneider today ordered Kamb to withdraw his counterclaim. He also ordered that, if Kamb wishes to refile, he do so under seal. Finally, he ordered Kamb not to talk to the press about the allegations in his counterclaim.]

Regardless, my purpose in blogging about l'affaire Kamb is not to express shock (shock!) that corporate espionage, licit or otherwise, occurs. It's to note that such information-gathering activities ("competitive intelligence," in the parlance used in the suit) are undoubtedly far more widespread than we know.

One can also infer that, while hacking is largely the province of amateurs (i.e, unpaid freelancers, aka geeks) or, in its most nefarious incarnation, people with ties to organized crime, corporate data gathering is paid for and encouraged by professionals. Indeed, I submit that it's so widespread we pay it no nevermind.

From Russians in the old days who used to scour the old Engineering Societies library on 47th Street in New York City to get the latest technical info (or read Aviation Week), to marketing types reading the trade rags, competitive information is the currency on which tech businesses survive. Sure, when it crosses the line into pretexting or tempting someone to spill the beans on company data they're pledged not to reveal, that's bad and often illegal. But, please, let's not be naive.

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