Talks, which began last week, continue today and tomorrow as the two try to reach a financial settlement. According to one report, Unilever could be seeking tens of millions of dollars in compensation.
The news was been made public by P&G itself, which alerted Unilever after a corporate intelligence firm it had hired overstepped internal guidelines.
Lawyers for the two firms are now negotiating some kind of settlement.
The intelligence firm was briefed to collect information on Unilever's US haircare business, and employed tactics which included going through Unilever's rubbish.
At a press conference earlier today, Anthony Burgmans, co-chairman of Unilever, said, "We were very shocked at the amount of information that ended up with Procter & Gamble. Talks are still very much ongoing to ensure there is no further damage to the interests of the company and of Unilever staff."
The talks are being led by Charles Strauss, president of Unilever's personal-care business in the US, and John Pepper, P&G's chairman.
P&G makes haircare products such as the Pantene shampoo line, as well as Head & Shoulders. Unilever's haircare brands include Salon Selectives and Finesse.