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It reads like a plot from a movie: One tech giant goes after another by covertly hiring a world-class P.R. firm to plant negative stories about its competitor in the media. The scheme backfires though, when a blogger that the firm approached about spreading the bad press turns around and goes public with the whole operation.

Crazy, right? And it’s apparently true. The client in question was Facebook, which hired the top P.R. firm of Burson-Marsteller to heap anti-privacy aspersions on Google — which (along with Apple) has already been under fire from federal lawmakers over privacy matters relating to smartphones.

In this case, the firm was focused on trumping up a minor Gmail feature called Social Circle, accusing it of violating federal fair trade rules and the privacy rights of millions of Americans. So the PR firm set about putting the machine into motion, trying to seed stories in places like The Washington Post, Politico, The Huffington Post and USA Today.

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The firm contacted a number of pundits and press people, one of whom was Christopher Seghoian, a blogger and privacy advocate. But instead of cooperating, the writer turned around and posted the email chain, effectively outting the situation. The firm wouldn’t name its client, but The Daily Beast looked into the matter and discovered the jaw-dropping Facebook connection:

“Confronted with evidence, a Facebook spokesman last night confirmed that Facebook hired Burson, citing two reasons: First, because it believes Google is doing some things in social networking that raise privacy concerns; second, and perhaps more important, because Facebook resents Google’s attempts to use Facebook data in its own social-networking service.”

It’s shocking, to say the least. Rarely is such a big company so clearly caught red-handed in sketchy behavior like this. And the fact that it’s Facebook railing about privacy issues might be the biggest head scratcher of all. (Doesn’t the company have enough of its own privacy issues to worry about?)

And to think — Google didn’t even consider Facebook a competitor. (It’s actually Microsoft it’s gunning for.) So they probably didn’t even see this one coming. Oh and for the record, Google denies that Social Circle violates any privacy rights. The company says it uses public info and personal connections across products so users can connect. (Thanks to the new spotlight on Social Circle though, many users who had never heard of this feature before are now curious about it.)

What do you think? Are you agog that Facebook would do this? Or do you think this is typical for large corporations, with the only surprise being that this one got caught? Tell us what your take is below.

For more info on this fascinating story, hit up any one of the source links that follow.

[via USA Today, The Daily Beast, BetaBeat, Washington Post, FastCompany, Telegraph.co.uk]