The interviewer asks how you would respond if a colleague were doing something illegal or unethical because they want to gauge your level of integrity and accountability in the workplace. It is essential to uphold ethical standards and report misconduct to ensure a safe and fair working environment for all employees. Many people say they would approach their colleague privately and express their concerns, and if necessary, report the behavior to a supervisor or HR representative. However, the interviewer wants to hear that you would prioritize the well-being of the company and its employees over loyalty to a colleague. It is perfectly reasonable to say you would do both, speak with your colleague and report them if they did not report themselves, showing that you have the interpersonal and communication skills and honesty they seek in an employee.