In 2002, Dell Computer, the reigning king of the personal technology market, was looking to put the coup de grâce on its biggest rival, Hewlett Packard. Dell had already crushed rivals with its cheap, direct-to-consumer computers and it vowed to do the same in the printer business, which HP dominated. Not content to sit by and watch its core business eroded, HP officials dispatched the company's competitive intelligence unit to uncover their rival's plans. A few months later HP had what it needed -- incredibly precise details about Dell's upcoming line of printers. In the end, Dell's printer business turned out to be less of a threat than some had feared, and the details of HP's covert snooping operation stayed buried until late last month, when they came to light in documents related to a messy lawsuit with a former executive. But coming on the heels of HP's espionage scandal last year, in which the company's investigators spied on its board of directors and journalists, the episode served as yet another reminder of just how extensive, and sophisticated, and sometimes ruthless, such snooping operations have become among major corporations.

HP is far from alone. The company is just one of many willing to go to extraordinary lengths to protect itself and, some say, to throw a spanner into the spokes of opponents. Details have emerged that Wal-Mart operates a massive employee surveillance program, sends out undercover operatives to infiltrate activist groups, and has a threat analysis team that regularly sifts through customer records. Steve Jobs, the CEO of Apple, is believed to have planted evidence of a fake product in order to ferret out a mole operating within the company. And at least two Canadian companies, Air Canada and drug maker Biovail, have paid private investigators to rifle through others' garbage for evidence of wrongdoing. Last fall, lawyers for Toronto-based insurer Fairfax Financial reportedly tailed employees of a New York hedge fund that Fairfax accuses of trying to do it harm.

All these cases have raised a furor in the press, but the courts give companies plenty of leeway to snoop. And for good reason. In the post 9/11 environment, the world is focused on security intelligence. But the world of protecting corporate and trade secrets is just as big, and the stakes, arguably, just as high -- especially if you believe that the health of a national economy is fundamental to a nation's ability to defend itself. Companies are duty bound to their shareholders to do everything legally possible to protect their assets, especially with corporate espionage on the rise. As a result, a huge private security industry, drawing from the ranks of retired police and intelligence officers, is growing to serve the needs of suspicious executives.

The question is, just where is the line between competitive intelligence and espionage? At what point does vigilance against spies and leakers -- even practising aggressive defence against rivals in the name of cementing market share -- become a threat in itself? The law is proving to be of little help in the matter, since technological advances have fast outpaced the courts. As recent history shows, corporate codes of ethics represent constantly shifting ground, where principles and guidelines are easily lost in the heat of battle, and where the line between smart business and malfeasance is defined by whether or not you get caught. "Some overzealous people are getting into areas that are unethical, and when the legal system catches up, will be illegal," says William Johnson, founder of the Business Espionage Controls & Countermeasures Association. "For the moment, there are a lot of grey areas out there." As technology gets more sophisticated, and with billions of dollars on the line, the temptations and ethical questions are only going to get more troubling.

Of course, for a company that has seen its secrets stolen all too often, such issues may appear black and white. Wal-Mart, for instance, has been leaking insider information like a sieve for years. In 2005, a confidential memo raced across the Internet that detailed some of the options the company was considering in order to cut its health care insurance costs, such as hiring only healthy workers. The memo sparked a firestorm of criticism from union activists. In March, an internal PowerPoint presentation that detailed the results of a customer survey showed up on a blog and is now widely available for download. Then, in April, an employee Wal-Mart fired blabbed sensitive information about a plan called "Project Red" that could entail spinning off the Sam's Club division as a separate company.

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