EXOD839 Can I trick competitors into revealing vital information? In many industries, accurate and up-to-date information about the competition is critical to business success. Unfortunately, this sometimes tempts merchants to use unethical methods to obtain information they need. One of the most common means is to impersonate a neutral figure, such as a customer, supplier, student intern, or government official. Is this a legitimate way to obtain information about a competitor? We need to know where to draw the line between legitimate market research and improper industrial espionage. Q: I'm interested in finding out if I can effectively compete in a certain market. Can I do a surreptitious survey of the level of price and service by pretending to be a potential customer or investor? A: Your desire to help customers by providing better service than they are getting from their existing suppliers is certainly commendable. But this and does not justify the use of deceit to examine existing market conditions. By viewing your suggestion through the prism of Jewish law, we will be able to discern the ethical problems it poses. DECEIT. The most severe problem here is deceit: the bogus survey is a way of tricking your competitors into revealing information they would like to keep secret. According to Jewish law, this kind of deceit is forbidden even if one does not lie outright. The relevant prohibition is known as geneivat da'at, meaning "stealing confidence." Confidence and trust are the foundations of civilized society; it is not justified to breach them just in order to make a few more dollars. Stealing money by fraudulently offering something in return is scarcely better than breaking and entering. Likewise, stealing information through deceit is scarcely more ethical than breaking into your competitor's safe to extract sensitive documents. EXPLOITATION Knowing your competitors' prices will help you to undercut them. But more important, it will give you a picture of the business environment in their industry. Their prices are probably based on a prolonged and expensive process of trial-and-error and learning about the market. Not only do you want to acquire this expensive commodity on the cheap; you also want to use this information to their disadvantage. The Mishnah [Gittin 5:8] tells us that if one person climbs a wild olive tree to shake out the olives, another person is not allowed to go and gather them from the ground. The second person would be taking advantage of the first person's efforts instead of going to the trouble of finding his own tree to harvest. In your case the transgression is compounded, because you would be using the "olives"-in other words, the market information-to the detriment of the person who invested in them. This is truly adding insult to injury. The practice you ask about resembles stealing a trade secret in order to compete with the inventor. Jewish law tells us that we should not take a free ride on the investments of others. They are entitled to fair recompense if we appropriate their efforts. UNTRUTH Furthermore, your survey letter is an outright lie, yet the Torah commands us, "Distance yourself from every falsehood " [this verse]. Truth is a supreme value, which should not be compromised even if there is no element of deceit or exploitation. According to Jewish law, we should only bend the truth in rare instances to avoid creating embarrassment or hurt feelings [Yevamot 65b, Bava Metzia 23b] Certainly, it is not permissible in order to fleece our business competitors. Human beings are created in God's image; we should strive to liken ourselves to Him; as the Talmud states, "The seal of the Holy One is truth" [Shabbat 55a]. Business often requires a degree of concealment, and that is why your competitors want to keep their capabilities and prices secret. But the legitimate practice of concealing some private information from your competitor or bargaining counterpart is far removed from a deliberate untruth. DISAPPOINTMENT Finally, the Talmud tells us that there is an additional, human dimension here. A business person who suggests a deal to a prospective customer has some legitimate hope and expectation of making a sale. The Mishnah states: "Just as it is forbidden to take advantage of others in commerce, so is it forbidden to take advantage of them in discourse. Do not ask [a merchant], 'How much is that item?' when you have no intention of buying." [Bava Metzia 4:10] The reason is that you are causing not only unnecessary trouble to the seller but also disappointment. Of course, merely inquiring about prices or services does not obligate you to buy from a particular version, and it is ethically permissible to shop around. But if you inquire about the terms of sale of the vendor, you must intend to give them a fair chance at getting your business. Otherwise, you are guilty of causing the vendor distress and disappointment. A bogus survey improperly raises false hopes. What options are open to you in your search for market information? Here are a few ideas: Public Sources. You may be able to get important information from public sources. Perhaps the firm publishes a catalog. Industry newsletters sometimes publish current pricing information. Advertisements occasionally offer special prices. Firms that do business with the government may be required to make the terms public, giving you at least a ballpark figure for private-sector pricing. The reporting requirements for publicly traded firms include the disclosure of accounting information that could be valuable to you. With a little imagination, you will probably find much useful data. Make a Deal. Instead of trying to get information underhandedly and on the cheap, decide that the market data you seek is valuable and worth paying for. Instead of pretending to be an investor, you can enter into a partnership with a current firm if conditions in the industry seem promising. (As assurance that you're not taking advantage of them, you can sign an agreement not to enter this industry on your own for some agreed-upon period.) Other possible deal partners are the other market players. Current merchants would be harmed by your entry into this market as a competitor, but customers and suppliers would benefit, and then they also have the information you need. Instead of making a fraudulent offer to a merchant, make a genuine offer to a supplier-one that will provide him with some guaranteed business in return for reliable market information. Or else sit down with a customer and suggest a deal that will provide him with special low prices in return for a survey of the market. However, you have to be careful. If suppliers or customers have agreements with merchants not to reveal pricing information to outsiders (like you), then it is unethical to persuade them to reveal this information. If you induce the customer to contravene his agreement, you violate the biblical mandate "Do not put a stumbling block before the blind" [Leviticus 19:14]-do not cause someone to stumble spiritually by transgressing. Another option is to actually decide to make a purchase. Then you may make an honest inquiry of competing businesses. For example, if you are thinking of opening up a haberdashery, you can decide to buy hats. Then you may go out and do some comparison-shopping. Even in this case, you have to be careful of the ethical problems we mentioned. To avoid deceit and unfair disappointment, you should plainly state that you're shopping around for the best deal. Most customers will go to at most two or three shops before deciding. If you're doing a broad survey, let the merchant know, so he can decide whether it is worth his while to invest a lot of effort in selling to you. Likewise, you need to restrict your research to a specific type of item. It is unfair to ask a merchant to take out his entire inventory in order to have a one-in-10 chance of selling one item. And to maintain truthfulness, you should not make up a cover story-hinting, for example, that you are looking for birthday present (even if you do intend to give the hat away, that's not your main object). Of course it is also necessary to actually make the purchase at the end of the day. Success in business sometimes depends on keeping some of your knowledge concealed. So you do not have to inform your prospective competitors that you are planning to go head-to-head with them. But for this exact reason you need to respect their rights to keep their service and price information under wraps and to disclose it only to serious prospective customers.
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