The present article discusses the changing facets of corporate crimes in the digital age, with a special focus on the Indian scenario. Corporate Crime is also called organizational crimes in White collar crimes. Today, corporations have become an integral part of society and with regular developments of firms; they have a major role to play in a country’s… Read More »

The present article discusses the changing facets of corporate crimes in the digital age, with a special focus on the Indian scenario.

Corporate Crime is also called organizational crimes in White collar crimes. Today, corporations have become an integral part of society and with regular developments of firms; they have a major role to play in a country’s economy. However, due to vital factors in the growth of the economy, it can’t be denied that our society runs at the risk of being exploited by these corporations and that too in the ever-increasing cyber age.

I. Introduction

Corporate crimes or White collar crimes are becoming widespread with the advancement of technology. They are defined as an organizational crime which is committed by certain individuals of high communal position within their legitimate occupation to benefit their employing corporation. Corporate crimes differ from traditional crimes and are tending to happen due to illicit business practices which are motivated by pecuniary benefits. In essence, it is the perpetrator’s prominent position which paves the way for the occurrence of corporate crime by committing a breach of trust endowed upon the corporation.

The Supreme Court in the case of State of Gujarat v. Mohanlal Jitamalji Porwal and Anr[1] has given the difference between traditional crimes and white-collar crimes. In its judgment, Justice Thakker had stated that murder can be committed in the heat of the moment but the corporate crime are economic offences which are committed with a cool calculation and planned strategy to gain personal profits.

Professional white-collar crime is related to corporate crime, which is a crime, committed by those who identify with crime and make crime their sole livelihood.[2] Such individuals generally don’t think of themselves as criminals, nor do they consider their activities criminal since most of their activities are usually part of their occupational environment.[3] Now, this becomes more problematic to deal with in the current digital age where the scope of financial frauds and corruption widens.

This is the reason that with the advancement of technology in the cyber age, people tend to fall prey to these types of crimes and the existing laws and regulations are not sufficient to curb them, because facets of corporate crime are also changing in this digital age.

Changing Facets of Corporate Crimes

With the rapid growth in digitally advanced technology, the world of corporate crime has been changing colours. The speed at which technology is getting advanced has made cybercrime the top threat to the growth of companies.[4] Now, cybercrime has become more insidious than ever and social media is no exception to this. As per the 2016 report of a computer security company, RSA, more than 500 fraud-dedicated social media groups were identified around the world and Facebook is the larger contributor with more than 60% of its members using language and community-specific platform for corporate fraud.[5]

What is even more alarming is that India and Southeast Asia contribute over 40% of the fraudsters on Facebook and with increased usage of other online messaging platforms like WhatsApp and Instagram, it is becoming the newest fraud communication channel for fraudsters. The social media fraudsters are mostly targeting banking or credit card related corporate frauds and their wide network is making innocent people vulnerable, especially as more unsuspecting ordinary citizens are actively engaged on these platforms.

Talking about corporations, cybercrime has expanded its scope from fleecing individuals to cover enterprises as well because now most of the companies are working online and their brand popularity and business development depends on the number of likes, clicks, followers or impressions on social media platforms.

Notably, there are certain agencies that solely work towards increasing fake likes and followers which is the main agenda through which companies can manipulate their campaign on social media and increase audience engagement. This endangers the credibility, quality of content, and authenticity of the website. The nature of the threat from cyberspace is changing daily and corporate crime has become quite creative with types like phishing, trojan, malware, Denial-of-service (DoS), and so on.

II. Current Indian Scenario

The current Indian legal system does not define the term cybercrime or corporate crime for that matter. Cybercrime loosely refers to any criminal conduct in cyberspace and corporate fraud is another subset of it. In India, the governing statutes for cyber crimes are the Indian Penal Code 1860 (IPC), which governs offences in relation to cheating, fraud, forgery, etc. and the Information Technology Act, 2000 (ITA) which penalizes persons penetrating offices utilizing electronic resources (computer and internet, electronic data or software or communication devices).[6]

There are also anti-cybercrime cells established in each state for investigation and prosecution of cyberattacks. Besides, there is also another fraud detection old age method through the help of whistleblowers. As per Kroll’s Global Fraud Report, 2015-2016 that there were 41% uncovered cyber frauds that were exposed by whistleblowers.[7] India also has a Whistleblower Protection Act, 2014 in place which aims to protect persons (whistleblowers) making disclosure in the public interest.

How to curb corporate crimes in the cyber age?

Corporate crimes or fraud can be prevented even in this digital age. Below listed are some of the essential actions that you can take to curb cyber frauds efficiently:[8]

  1. Training: For cybersecurity, it is required that employees of organizations as well as ordinary people are made aware, educated, and help in skill development to identify cyber frauds.
  2. Update: As we know that technology keeps on getting developed better, it becomes crucial for an organization to keep its security system updated all this time. Though this may not be a strong alternative to guarantee protection against cyber fraud, surely it poses a good fight to the hackers.
  3. Response: An organization should be well equipped with sufficient resources and infrastructure so that they will be able to immediately respond to cybercrime. Organizations will need a group of skilled persons who are competent enough to identify the risks and respond fast to such attacks.
  4. Top Management: Decision-makers who are in top management positions must be most aware of potential threats, the fallout of cybercrime and mitigating action if any. If the senior management is not supportive or lacks awareness, all actions taken by it will fail.
  5. Stringent law and its enforcement: Last but not the least, it is equally important for the legislature to make amends to the existing laws and regulations with the changing facets of corporate crimes so that no more innocent people fall prey to such activities.
  6. Cyber Insurance: In the nascent stage in India, cyber insurance will provide protection to individuals from internet-based risks. Data breaches and cyber-attacks have started being insured in several countries, including the US, where around 30 per cent of companies are insured.

III. Conclusion

The government of India has indeed taken certain positive measures in the field of cybersecurity such as setting up nodal agencies like the Computer Emergency Response Team (CERT-In), under the Ministry of Information and Technology, notification of the NCSP, and so on. However, given the current scenario with the steady growth of cyber crimes, there is a need to put greater emphasis on strengthening the enforcement of laws and regulations currently in place. Also, with the changing facets of corporate crime, there is also a need to introduce new laws by the legislature which are in line with the fast-paced advances in technology.

With the nation’s focus on making India digital, boosting the e-commerce ecosystem, the dependence on the internet will continue to increase and hence, cybersecurity with stringent laws and measures in enforcement is the need of the day. Though the country has seen a lot of change on the regulatory front with the introduction of SEBI guidelines, the Amended Companies Act, etc, there is a certain ambiguity in the system and the government needs to bolster cybersecurity laws especially to handle digital corporate frauds through cyber crimes.

[1] State of Gujarat v. Mohanlal Jitamalji Porwal and Anr, AIR 1987 SC 1321.

[2] Encyclopaedia Britannica, Frank E. Hagan.

[3] Frank E. Hagan, Corporate Crime, Available Here

[4] Redefining business success in a changing world CEO Survey, Available Here

[5] White Paper, Hiding in Plain Sight, Available Here

[6] Cheating & Stealing White Collar Crime in Digital Age, Available Here

[7] Kroll, Annual Global Fraud Survey 2015, Available Here

[8] Robin Banerjee, ‘Who Cheats and How’? Scams, Fraud and the Dark Side of the Corporate World, Available Here

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Updated On 11 May 2021 10:18 AM GMT


Deepshikha is a law student from National Law University, Odisha.

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