About the phenomenon

Free market economies are based on competition as the driver of improvements in efficiency and productivity. Business cannot develop without competition, since there is no other way for different operating models or techniques to be compared. Free markets come up against many problems which interfere with competition, ranging from monopolies and cartels to information problems and barriers to entry. Just as significant for many business actors is the role of unfair competition, in which a competitive relationship takes place, but the quality and price of goods and services does not determine the winner. Instead, certain competitors leverage tactics such as insider trading, information warfare, counterfeiting, and other underhand methods to outperform or eliminate the competition. This undermines the whole purpose of free markets, and produces a situation where the unfair competitors are able to maintain or achieve monopoly positions by taking down their competitors. The majority of businesspeople and public sector actors have encountered some form of unfair competition in practice. Yet the issue is under-studied, and most businessmen, politicians, and administrators are either unaware or too little aware of the problem, allowing it to run unchecked, sometimes with devastating consequences.

The Information Security Institute is working to combat unfair competition and protect our clients from it, by providing both a classification of types of unfair competition and a detailed analysis of the most effective forms taken by unfair competition today. Awareness is highest in relation to long-established unfair competitive techniques such as blackmail, spurious lawsuits, and the misuse of the traditional mass media to spread disinformation. While these practices persist, businesses and states have developed means to counter them and reduce their frequency.

Today, however, the business environment is fast-moving and new threats are emerging daily. Most companies and organizations have transitioned some of their activities into the online sphere, and even those which have not are vulnerable to reputational damage from material posted on the Internet. Whereas traditional mass media has journalistic checks and is limited to a national or local area, online disinformation has a global reach and can easily spread unchecked, through techniques such as the creation of realistic-looking “fake news” sites and search engine optimization. In this anarchic terrain, businesses and organizations are faced by potential attacks from a wider, and similarly global, range of adversaries. One of the less well-understood of these is the phenomenon of religious extremism, or the use of religious discourse to damage the reputation of a business or organization.

The methods of religious extremists are simple, yet radical, and highly effective. They are little studied in the business scholarship or by corporations themselves, and are therefore difficult to counter. Today, businesspeople can be thrown into bankruptcy or driven out of particular markets without even understanding how or why this has happened.

At first glance, it seems strange to connect unfair competition in business, politics, and social organizations to religious extremism. The best-known extremist groups are not known for targeting businesses, and the established forms of unfair competition do not leverage religion or ideology. Digging below the surface, however, the two phenomena are closely linked. Since World War II, there has been an enormous global boom in new religious movements (NRM’s), initially small and emerging groups marginal to or outside established religions, often with novel doctrines and influential guru-figures. Many of these NRM’s, as well as some traditional religious organizations and brotherhoods, have adopted models similar to those used in business, and have developed business interests of their own. The new gurus have often become very rich, with flocks of followers, mansions, expensive cars, and global business empires. Such church authorities hold considerable influence over their followers, and the more sophisticated can launch information warfare on a large scale, not only to further their doctrine, but to further their business. Such organizations can gain huge media reach, as in the case of televangelists and Internet personalities, and/or they can function as the hubs of trust networks in particular localities, acting as gatekeepers regarding whether particular people can carry out business in a town or area.

An example of NRM as self-enrichment is the Osho movement. Osho’s followers have bought a 64,000 acre area, the Big Muddy Ranch in Oregon, for $5.75 million. By the end of 1982, Osho’s personal fortune had reached $200 million. Because Osho is a religious figure, his income is tax-free in the US. He also reportedly owned nearly a hundred Rolls Royce cars, four private airplanes, and a combat helicopter. His supporters reportedly wishes to expand the number of cars to 365, one for each day of the year. 

From the 1980s onwards, businesses have begun to learn from the methods used by NRM’s, particularly their methods of marketing and of organizing a flow of clients. By the end of the 20th century, businesses were heavily influenced by people who openly called themselves business “priests” or management “gurus”, a role equivalent to the NRM leader. Such leaders could make fortunes preaching to businesses, sometimes based on faddish, trivial, or outright wrongheaded ideas which were rendered palatable by their charismatic packaging. There were unquestionably effective mechanisms derived from the NRM experience which were adopted by responsible business strategists, but the importation of church marketing into business marketing also carried over the unsightly features of the more radical and problematic religious groups: the establishment of a sacred doctrine, a prohibition on critical thought, the use of thought-blocks and social pressure as substitutes for reasoning and argument, the creation of centers devoted to producing apologia and “spreading the word”, the aggressive “defense” of the faith from heretics and dissenters, the initiation of hate campaigns and witch-hunts against outsiders considered threatening, the enforcement of homogeneity of thought within an organization, and the commission of financial and other exploitation behind a veneer of charismatic authority. The main external tool for sustaining the organization is the dissemination of apologia, and the main internal tool is the use of doctrinal exegesis. It is typically maintained that the faith is true, and yet the methods of verification are foregone; instead the main methods deployed are those of strategic attack and defense.

This system of apologia and doctrinal policing was almost completely unknown in earlier periods. Even if businesses used “hidden persuaders” to market a product or encourage spending, they did not attempt to create systematic loyalty to entire organizations or doctrines. As a result of the imitation of NRM mechanisms, business has acquired a religious form. It was realized than NRM’s, televangelists and alike can make enormous profits from dogmas, without delivering a product. The capture of an audience guarantees a constant flow of rents to the guru. Businesspeople realized that the same strategy could be used throughout business, either alongside or instead of producing valuable goods or services. Businesses thus began enforcing corporate dogmas of their own, aggressively protecting their brand-image and related beliefs through both above-ground and underhanded means, anathematizing sinners, launching attacks on opponents and outsiders. Because there is money to be made on dogma, there is profit to be made on dogma.

The field of business in the 21st century is thus very different from what it was at the start of the 20th. Practices and discourses which were previously uncommon or unknown have now become widespread. A prime example of NRM-like marketing is the Amway corporation, an international, multi-level marketing organization. It is the largest such company, with reported sales in the billions and operations in over a hundred countries. It has 750,000 distributors in the US alone, connected by a cleverly designed “voicemail” system which keeps them constantly under the supervision of their superiors in the chain structure. Amway has been criticized by former employees and executives, firstly as a pyramid scheme in which profits depend on luring ever more people into its system, and secondly as a pseudo-Christian cult whose members must chant Christian Biblical mantras while concentrating their thoughts on images of conspicuous consumption such as cars, mansions, and yachts which cover the doors and mirrors of their homes. Members are required to donate to outreach campaigns and to listen to inspirational audio recordings and participate in motivational seminars which among other things, involve leaders of the group denouncing the immorality of the outside world. 

The company is accused of paranoia towards critical insiders, carrying out rallies similar to religious revival meetings or Polish Communist Party meetings, and using cult-like recruitment and retention tactics to exploit affiliates for minimal returns. The ever-growing network of Amway supporters, inspired by the twin themes of conservative Christian ethics and free enterprise, provide a constant supply of money which flows upwards in the corporate chain, and also operate like a private political army, engaging in mass campaigns under incitement from their superiors in the organization. Amway and its leaders donate heavily to the Republican Party and various conservative causes. In return, the company received a targeted tax break of $19 million from the Republican-controlled Congress in 1997, and its affiliate Betty DeVos became Education Secretary in the Trump administration in 2017. The company has faced repeated court cases and regulatory actions everywhere from Canada to China, so far mostly unsuccessfully, including cases involving accusations of illegal pyramid scheme tactics, fraud, racketeering, tax evasion, copyright violation, defamation, and marketing of fake supplements. Amway were accused in 1995 of reviving and amplifying a defamatory urban legend associating competitive business rival Procter and Gamble of connections to Satanism, allegedly using the voicemail system to promote the story. Procter and Gamble received $19.25 million in compensation for this defamation in Utah in 2007.

Similar tactics affect politics in the US, with methods used by NRM’s, churches, and related businesses increasingly being adopted by smear campaigns in what is effectively a monopoly sector. For example, systematic attempts have been made by American conservative Christians to portray leading Democrats such as Hillary Clinton and Barack Obama as Satanists, Jews, Muslims, or anti-Christian.

In our analysis, we maintain that these types of religious extremism are not primarily motivated by religious allegiance. They do not derive from particular aspects of the theology or ecclesiastical organization of specific religions, and are not mainly about the adoption of more extreme doctrines in the religious sphere. Rather, they are about the exploitation of religious mechanisms – either in a directly religious or a veiled secular form – as systems of brainwashing, capture of allegiance, and information dissemination. Based on eight years of practical experience with countering religious extremist defamation, we have developed a systematic analysis of the relationship between religious extremism, information security, reputational risk, and unfair competition.

Modern corporations are outwardly secular. However, they often have a rigid, dogmatic, canonical form of internal construction. Corporations increasingly tend to construct themselves as a way of life, to which members owe absolute allegiance. Any departure from the internal dogmas or behavior codes of a corporation are seen as an attack on its way of life. Hence, small variations in the beliefs and practices of people within the organization, in the workplace or outside it, are treated almost as an existential threat. They thus tend to react in extreme, radical, dogmatic ways to any deviation, however minor. In the worst cases, organizations claim a monopoly on particular spheres, and launch aggressive campaigns to keep competitors or dissidents out of the sphere.

This applies to non-governmental organizations (NGO’s) and federations, as well as companies. One example of an activity increasingly captured using cultish monopoly methods is the sport and martial art of fencing. During the last few decades, historical fencing federations have emerged to organize and capitalize on the growth in the practice of historical forms of fencing. These forms are taught by a range of authorities, maestros, coaches, and other specialists. These specialists have increasingly adopted a rigid set of dogmas, which operate like a religion, consisting of a series of rigid axioms taken as indisputable and insulated from critique and testing. The axioms are not discussed and are treated as untouchable. Any structure which rejects the orthodox view or refuses to affiliate to the orthodox federations of historical fencing is subjected to aggressive, radical reactions from those inside the orthodoxy. This manifests for instance in trolling, bullying, and cyber-attacks against the dissidents. People are subjected to such attacks simply because they take a different position on issues of contention. On the surface, this seems bizarre: historical fencing is not a religion, yet within the movement there have emerged untouchable dogmas of a religious kind. Any person challenging the dogmas is attacked. One thus finds in the historical fencing field a set of practices of enforcement of orthodoxy which are religious extremist in structure, even though they contain no obvious religious element.

The real motive for these tactics, we contend, is the creation of monopolies or the conduct of unfair competition. The dominance of a particular network and its dogmas over a particular sector has the effect of generating a permanent income or rent, or permanent domination of a particular market sector. The enforcement of orthodoxy has anticompetitive effects, enforcing the primacy of a cronyist rather than a free-market competitive structure in the affected sector. It is increasingly easy and profitable to engage in such anticompetitive practices, instead of engaging in honest business competition. The outcome of this growth in anticompetitive practices is that success is disconnected from the goals of an activity – from provision of quality products at low prices in industry, from outcomes for the population in politics, from truth and evidence in academia, etc. The motivation for such practices is primarily economic: the capture of markets. We are dealing in such cases with a kind of covert protectionism through the introduction of synthetic canons which serve to exclude open competition, either through informational-reputational backlash or through collusion with regulators. The use of thought-control techniques within the organization and the customer base has the effect of locking-in a particular market, while the use of aggressive tactics and disinformation serves to capture market share and eliminate or marginalize competitors. Thus, the real motive of these kinds of religious extremist methods is the capture and retention of monopolistic or oligopolistic market positions in the affected sectors, by means unrelated to the quality or cost of goods and services provided.

These emerging methods have been the focus of our scholarly research at the Institute. Finally, we should also note the inadequacy of legal mechanisms in responding to such tactics. Reputational attacks take place at a far greater speed than legal processes, and by the time the law intervenes, it is usually too late to limit the damage done. For example, it took 12 years for Procter and Gamble – a massive global corporation with big pockets and an army of lawyers – to obtain compensation from Amway. A smaller rival subjected to the same attack would have been put out of business and struggled to finance court action. In the vast majority of cases, moreover, the use of these kinds of uncompetitive practices is not legally regulated. For example, most of Amway’s methods have been ruled legal in the courts of numerous countries. It is not illegal to force or pressure affiliates to purchase motivational materials as a condition of reselling goods, or to require affiliates to stay in touch with superiors through voicemail. When an action is illegal or unlawful, it is often difficult to tie it to the company or organization which it benefits. In the case of fencing for example, it is impossible to link the beneficiary federations directly to trolling campaigns. Given the close relationships between religious extremists (including their imitators) and political elites, it is unlikely that their uncompetitive practices will be substantially legislated against anytime soon.

Unfair competition

Business reputation

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