Business Owners Suspect Sabotage Tactics From Competitors

May 25, 2011 — -- Stewart Patey, owner of a new mattress store in Everett, Wash., believes a rival business took competition too far by vandalizing his delivery truck. The incident appears to be part of a rising tide of business sabotage both online and offline being reported across the country.

Patey first noticed wiring scraps next to his truck outside his store in Everett last week. A surveillance camera captured video of an unidentified man crawling under Patey's delivery truck at 2:18 AM on May 19. Patey, who opened Mattress City in April with his wife, said he believes someone is trying to sabotage his business.

"My first suspicion was someone grabbed the copper wiring to go sell it, but it was still there. You can see this person was on a mission and went directly to his task," Patey said.

The surveillance video shows the man remained there for about 17 minutes cutting wires, which led to repairs of $300.

Before this vandalism, Patey said he has reported three incidents of graffiti, also caught on video. In the six weeks Patey's store has been open for business, he filed four police reports and has paid about $1,600 in repair costs.

He said that competitors may be "irritated" in part because Patey offers a discount to his customers who donate their mattresses to a charity, the Northwest Furniture Bank.

"Truly a cutthroat business, isn't it?" Patey said with a laugh. "We're trying to help other people but they don't like it because we're cutting into their profit. I just wish people would leave us alone so we can run our business."

Small business sabotage appears to be on the rise, especially in a tight economy.

In late February, police in Upper Darby, Pa., charged a pizzeria owner for releasing mice in two competing pizza restaurants.

Police arrested Nicholas Galiatsatos for cruelty to animals, terroristic threats and criminal mischief after leaving a bag of mice in the bathroom of Verona Pizza in a suburb of Philadelphia.

Galiatsatos is also accused of leaving another bag of mice in a second pizzeria across the street, Uncle Nick's Pizza.

"I've never had to deal with mice as an instrument of criminality. And certainly I've never had to deal with pizza and mice at the same time," Upper Darby Police Superintendent Michael Chitwood said.

Galiatsatos, who was released under bail and is awaiting court action, has since sold his business, according to Chitwood.

Competitors are also turning to online sabotage as well. And it's not just the little guys who want to get an edge -- social network giant Facebook admitted a few weeks ago that it hired top public-relations firm Burson-Marsteller to pitch anti-Google stories to media outlets, suggesting story lines that Google was invading people's privacy

Seeding Online Review Sites

Panagiotis Ipeirotis, a professor of information systems at New York University's Stern School of Business, said a virtual cottage industry has sprung up where individuals are paid to write comments boosting businesses -- or knocking others -- on review websites like Yelp or Amazon.

Ipeirotis surveyed an online marketplace called Mechanical Turk, owned by Amazon, which connects businesses and developers to hire "workers" for small "tasks."

"There were quite a few tasks that had the sole purpose of gaming social media," he said, including creating reviews, clicking "like" on a Facebook site or commenting on a YouTube video – all fake user content.

He collected data from the site in September and October, as reported by the New York Times. He found "spam" advertisements offering to pay workers around 10 cents to $2 to create an online account on a site and write a review. His data, displayed on his research website mturk-tracker.com, found requests to pay for both positive and negative reviews.

Paying to Game Social Media

One user offered to pay workers 25 cents to write a one-star product review on Amazon.com of three different dog training collars.

"We don't know what he's doing, but he's trying to sabotage the competition," Ipeirotis said of that user's post. After Ipeirotis released his findings last year, he said Mechanical Turk "acted rather quickly" to prevent spam-like posts on its site.

"Since then, there are still attempts and people are trying to be more careful how they describe the tasks," Iperiotis said. "They don't directly ask people to post spam, but in a very indirect way they can do that. It still exists, but I can see why it's hard to detect these cases."

Amazon could not be immediately reached for comment.

When asked if his research dissuaded him personally from trusting online reviews, Ipeirotis said no.

"Spam cannot overwhelm the market. I just trust a little bit more products that have reviews that cover diverse points of view," he said.