Should the US engage in espionage for economic gain?

Passcode was the exclusive media partner at an event on economic espionage hosted by the Atlantic Council think tank. Here’s what we learned.

Economic espionage is common across the world: Many countries use their intelligence apparatus to steal foreign trade secrets for the benefit of their own private sectors.

The US, however, publicly opposes this kind of spying for economic gain on moral grounds and insists it does not participate.

Should it?

A panel of cybersecurity and legal experts debated this question at an event hosted by the Atlantic Council think tank in Washington. Passcode was the exclusive media partner for this Cyber Risk Wednesday event largely focusing on whether or not the US should engage in corporate espionage.

Here are three things we learned: 

1. The US may be nearly alone in seeking this moral high ground.

Corporate espionage is not currently illegal under international law on the international field, the experts said, and local laws prohibiting it are often ignored. “All espionage violates local law, and [yet] it’s practiced by every nation in the world,” said Stewart Baker, partner at international law firm Steptoe and Johnson, and former general counsel to the National Security Agency.

Absent strong legal disincentives, the US has sought to discourage this behavior. It’s been largely unsuccessful, said Dmitri Alperovitch, cofounder and chief technology officer of security firm CrowdStrike. “The reality is that we’ve been trying to create a norm against this type of conduct for decades. Not only can we not convince the challenging partners like China and Russia, we can’t even convince our closest friends.” 

2. The US likely hasn’t joined the espionage fray because it doesn’t need to – for now.

The US, Mr. Alperovitch said, is currently leading the world in technological innovation, and thus has little incentive to conduct corporate espionage for its own economic gain. Should the US fall behind, though, he notes that could change. “If in 30 to 40 years, God forbid, we’re no longer No. 1,” Alperovitch said, “are we really going to take the same approach to get to first place– that we’ll never do [corporate espionage]? I’m dubious of that.”

3. As a country’s economic standing improves, its stance on espionage might change, too.  

Countries such as China and Russia, said Harvey Rishikof, chair of the American Bar Association’s advisory committee on law and national security, will likely become more protective of their intellectual property as they develop more of it.  

“As our adversaries begin to understand their own innovations [and] once they have their own things to protect," Mr. Rishikof said, "they’ll understand why it’s a bad thing to go forward and have someone try [to steal it].”

Two Notable quotes:

Mr. Rishikof on the jurisdictional difficulty facing the US government when it comes to cracking down on those who carry out economic espionage: “We can indict individuals. But if we cannot enforce the indictment – and at the same time that country uses other apparatuses in order to get around those indictments – that’s a problem.”

Mr. Baker on how the US does not have the close relationship between the government and the private sector required for corporate espionage: “You need what amounts to state champions who are well-integrated into the government, in a way that frankly US industry simply isn’t,” he said. “We’d get the occasional secret, but we wouldn’t get the things that are most valuable to the companies that we most wanted to help.”

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