In the annals of corporate spying, things don’t get much juicer than the current tussle between Starwood Hotels and Hilton. Today, according to the Wall Street Journal, Hilton said it has received a federal grand jury subpoena connected to allegations by Starwood that Hilton has been using purloined Starwood files to develop a new luxury hotel chain. On April 16, Starwood filed a lawsuit in federal district court in New York, claiming that two of its former executives who defected to Hilton last year made off with confidential documents. The material, Starwood alleges, details Starwood’s plans for future development of its luxury brands, including the St. Regis and W Hotels, as well as other information. All told, Starwood’s complaint says, the executives were involved in “the ransacking and theft of more than 100,000 electronic and hard copy files containing Starwood’s most competitively sensitive information.” This, the filing states, “is the clearest imaginable case of corporate espionage.”
Just how clear a case it is will have to be duked out in court. But one thing is certain: This kind of stuff happens all the time. The courts are full of lawsuits in which businesses allege that former employees have made off with confidential files. Even the most sophisticated companies have alleged to be victims, as I noted in an article last fall about a case brought by Intel. If a technology leader like Intel can’t assure data security, who can? In this era of DVDs and portable flash drives, is there anything companies can really do to prevent this from happening?
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