Being in a corporate world, every professional is interested to know about their competition or competitor. General questions like this make them aware of the vacancies available in other companies and what they are offering in market. This will help them better to negotiate with their employees. Its up to the candidate how they answer the question to use it in their own favor. Obviously if the candidate is already working or have any other options, he will be much confident in front of the interviewer. Also by such questions, many of of the recruiters try to analyse the need of the candidate.
You never know whats going on in mind of a recruiter. Most of the time face expressions are totally dumb with no clue.