The Ethics of Competitive Intelligence: Where to Draw the Line

I’m the type of person who sees opportunity everywhere. Whether it’s a natural curiosity or ambition, I’m always up for learning something new or gaining an edge in any aspect of life.

It’s human nature to want to get ahead. However, there always seems to be a catch- fine print, or terms and conditions that complicate the journey.

While these might seem like frustrating roadblocks at first, if we reframe them, they actually offer moments of reflection to protect us.

In the case of competitive research, I’ve seen some seriously inventive strategies (ranging from cheeky guerrilla tactics to downright invasive)...so what’s okay, and what’s too far?

Let’s dig in.

Ethics, a Principle or a Pretence?

Ethics aren’t held in high regard despite being integral for long-term success.

It could be that businesses are simply choosing to prioritise profit over principles, or perhaps there’s a serious lack of regulatory oversight, or it might be that the prospect of outperforming competitors is just too enticing.

The businesses that succumb to these traps might enjoy the immediate gains in the short term, but their actions will catch up to them. Consumers are more empowered and vigilant than ever, and they’re bound to take action if impacted.

While competitive intelligence itself is more related to business competitors, it typically produces a domino effect that affects the business as a whole.

Seasoned consultant Ron Carucci published an article in the Harvard Business Review called Why Ethical People Make Unethical Choices. He writes about how businesses set themselves up for ethical catastrophes.* They create spaces where people feel forced to make certain choices.

In the case of competitive intelligence, if there’s pressure to reach specific performance targets or conflicting goals, companies may feel like they need to adopt aggressive or over-the-top probative tactics-such as “spying” on their rivals.

Rivals are threats, and when threatened, people can resort to impulsive thinking and territorial behaviours…fear of losing market share likely won’t bring out the best in us, particularly if you’re a business owner with a huge amount of skin in the game.

Striking the Ethical Balance

With these fears lingering in the air, how do businesses conduct competitive intelligence (CI) without stepping on any toes?

I’m a strategist, so naturally, I’m going to suggest building a framework!

American entrepreneur Victor Kiam once said,

“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”

Companies may sometimes view ethical challenges as a hindrance to their decision-making and goals, but they’re ultimately a core component of the equation. With this kind of attitude in play, businesses can take a page out of Kiam’s book and look at ethics and traditional opportunities as two sides of the same coin.

Just take one look at the state of corporate social responsibility today. The emphasis on transparency and accountability means that businesses need to care.

Building an Ethical Framework

So, what would an ethical framework actually look like?

Competitive intelligence comes with some unwritten rules, but many others are well established through legislation and regulation.

That’s right—ignore these, and you could land yourself in hot water.

Step 1 - Understand how to stay compliant

There are antitrust laws, intellectual property laws, privacy laws, and plenty of acts that influence competitive intelligence. With these alone, it’s clear that the line between giving your company leverage and being invasive and sneaky is razor-thin.

Make sure you know which lines can absolutely not be crossed.

Step 2 - Generate a code of ethics

Let’s also speak to those unspoken rules: Your framework should adhere to legal boundaries and be heavily informed by a code of ethics that emphasises fundamental values. I’m referring to topics like:

• Respect
• Honesty
• Integrity
• Honour
• Fairness

These principles can be applied to virtually every aspect of CI and help to distinguish between grey areas and those that are off-limits. That way, there’s no room for ambiguity.

Peter Drucker famously said, “Culture eats strategy for breakfast.” So, while we certainly want ethical boundaries in place to avoid getting into trouble, it’s not just about staying compliant.

Step 3 - Define appropriate channels for intelligence gathering

Other than the classic methods, such as gathering data from public sources and not accessing confidential information, CI processes need to be open, transparent, and thoroughly recorded. No market manipulation, no non-consensual information gathering, and certainly no deception should be involved.

Where are the best places, and what are the best ways to glean insights for your competitive intelligence strategy?

• Customer feedback loop: Customers can openly tell you exactly what they think about brands and businesses. If a competitor’s product stinks…it’ll likely be all over their reviews and social media.
• Industry events: Conferences and trade shows are worth attending now and again. Companies come prepared to give their best and showcase their wares, so you won’t have to do the digging yourself.
• Publicly available data: Scour the internet, and you’ll find all sorts of financial filings, industry reports, articles, and first-hand documents that are made available to the public.
• Third-party market research services: They are are bound by strict compliance and confidentiality codes and can provide data collection services without crossing any boundaries.
• Marketing content comparison: Compare and contrast public-facing materials like ads and content, which will tell you plenty about tone, target audience, and what they consider their bread and butter.
• Industry benchmarking: Checking out how your business stacks up against the market using aggregated data will give you the big picture without targeting specific competitors.

The grey area tactic:

• Mystery shopping: Going through a buying journey like any other customer is a clever approach. But make sure to never take images or misappropriate products!

Final Thoughts

Competitive intelligence doesn’t involve a fight to the death, nor should it carry that sort of mindset. Businesses should draw lines and set boundaries from the very beginning in order to protect their reputation and set the stage for responsible growth.

In our CI journey, we don’t want to make any enemies. Let's take off the blinders and start seeing our competitors as our allies, and it might just lead to an improved ethical consciousness.

👋 Hi, I’m Kat—strategist, futurist, and CEO of Bear Venture Group. I work with ambitious founders and business leaders to crack tough growth challenges, scale smarter, and win big. Through my newsletter Strategy Sketch, I share no-fluff insights on strategy, tech and wellbeing.

Connect with me on LinkedIn. Let’s make your next move your best move!