Proctor & Gamble (P&G) has paid compensation to Unilever after spying into its hair-care business. The total payout is believed to be about £6 million.
Investigators working for P&G rifled through Unilever's rubbish bins to gather intelligence about its operations.
The two companies agreed to settle the case to avoid a threatened court action. Three P&G employees have since been fired.
Talks began after P&G senior management discovered outside contractors had obtained Unilever hair-care marketing information using means that did not meet P&G's rules.
The spying - which involved third-party and in-house investigators - had been taking place since autumn 2000 and continued through spring 2001.
P&G chairman Mr John Pepper said: "I have been personally involved in ensuring that none of the information has been used or will be used in any P&G plans.
"This agreement will have no impact on the effectiveness of our product or marketing plans and will not inhibit fair and vigorous competition in the marketplace".
PA