That began to change in 2010, when Google admitted that Chinese cyber spies had penetrated its networks, stolen source code, and used Google both to spy on its users and to worm their way into many other companies. That was in part because they did not understand it and in part for fear of antagonizing countries in which they wished to do business. The ubiquitous digitization of information and pervasive connectivity of electronic networks have facilitated espionage as well as productivity, and they have turned exceptional theft directed against the largest American companies into a daily reality for companies large and small.įoreign intelligence services and their surrogates have been penetrating the networks of Western corporations on a regular basis and stealing technology electronically since the late 1990s, but for years most businesses preferred to ignore the problem. 3 The incidents that led to the act, while notorious, were exceptional. This was the background against which Congress passed the Economic Espionage Act of 1986, which criminalized stealing intellectual property. American know-how was the target, and by the mid-1990s, tens of billions of dollars’ worth of intellectual property had reportedly been stolen from American companies. Though he was never convicted, German prosecutors tied him to a trove of secret GM documents, and VW settled with GM for $100 million and a commitment to buy $1 billion in auto parts. In the early 1990s, the purchasing chief for GM’s European operations decamped for Volkswagen, allegedly taking with him GM’s cost-cutting secrets. 1 More recently, starting no later than 1980, Hitachi and other Japanese companies repeatedly launched espionage attacks against IBM and other American companies, with the support of the Japanese government. ![]() ![]() In 1812, Francis Cabot Lowell traveled to Britain, where he visited and managed to memorize and steal the secret workings of the Cartwright loom. Chinese silkworms legendarily made their way to India in a clandestine transaction. Economic espionage is not itself a new phenomenon. The lawless world of international espionage, until recently the preserve of the most secretive organs of government, has come to affect the everyday commercial affairs of businesses around the world, which are woefully unprepared to deal with it.
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