P&G to Compensate Unilever for Industrial Espionage

07 September 2001

Ten million dollars – beans by the standards of the multinational mammoths involved – will change hands in compensation for confessed corporate spying by Procter & Gamble on Unilever’s Elida Fabergé haircare brands, Organics and Sunsilk [WAMN: 04-Sep-01].

In its clandestine information gathering, P&G spooks are said to have rifled through garbage bins for data on its rival’s products, illicitly obtaining some eighty key documents in such fashion.

Both combatants were zip-lipped about the terms of yesterday's settlement, neither being prepared to comment on rumours that: P&G is to accept an independent audit of its new product launch itinerary; Unilever is to delay a number of planned product launches; certain P&G staff are to be reassigned.

Said Unilever's US president and chief executive officer Charles Strauss: "We have a settlement that ensures our confidential information is protected.”

Added P&G chairman John Pepper: “This was an unfortunate incident … I have been personally involved in ensuring that none of the information has been or will be used in any P&G plans. This agreement will have no impact on the effectiveness of our product or marketing plans and will not inhibit fair and vigorous competition in the marketplace."

Both sides were at pains to emphasise that the deal conformed to all requirements of antitrust law, and both insisted that they now consider the matter closed.

“There are two ways of looking at this," volunteered one outsider, Jim Gingrich of stockbroker Sanford Bernstein: "One is that you had some folks who did some competitive intelligence that was a little too enthusiastic. But then the senior management [of P&G] has come forward and says we want to make amends."

Other entrail-rakers, however, believe the affair could inflict long term damage on P&G's reputation.

News source: Financial Times