Uber had spe­cial team to ob­struct le­gal cases and spy on ri­vals, court told

The Guardian Australia - - World News/Opinion - Ju­lia Car­rie Wong in San Francisco

Uber had a team of em­ploy­ees ded­i­cated to spy­ing on ri­val com­pa­nies and “im­ped­ing” le­gal in­ves­ti­ga­tions into the com­pany, a former em­ployee tes­ti­fied in fed­eral court Tues­day.

The dra­matic pub­lic tes­ti­mony, on the eve of jury se­lec­tion for the hotly an­tic­i­pated civil trial over al­le­ga­tions that Uber stole trade se­crets from Google’s self-driv­ing car spinoff Waymo, came af­ter it was re­vealed that Uber had with­held ev­i­dence, lead­ing Judge Wil­liam Al­sup to delay the the trial in­def­i­nitely.

Ear­lier this year, the at­tor­ney for Richard Ja­cobs, a former Uber em­ployee, had sent a let­ter to Uber’s in-house coun­sel with his al­le­ga­tions about the spe­cial group. But Uber had not pro­vided the let­ter to Waymo as part of le­gal dis­cov­ery be­fore the start of the trial. On Novem­ber 22, fed­eral pros­e­cu­tors, who are con­duct­ing a sep­a­rate in­ves­ti­ga­tion, alerted the judge to the ex­is­tence of the let­ter.

“If even half of what’s in that let­ter is true, it would be a huge in­jus­tice to force Waymo to go to trial” as sched­uled, Judge Al­sup said.

Ja­cobs was a man­ager of global in­tel­li­gence at Uber from March 2016 un­til April 2017. Af­ter he left the com­pany, his at­tor­ney sent a 37-page let­ter to Uber’s in-house at­tor­ney de­tail­ing his con­cerns about po­ten­tially crim­i­nal or un­eth­i­cal ac­tiv­i­ties within Uber’s “strate­gic ser­vices group” and “mar­ket­place an­a­lyt­ics” teams.

Uber and Ja­cobs reached a $4.5m set­tle­ment, which in­cluded a nondis­par­age­ment clause and a one-year con­sult­ing gig for Ja­cobs to help Uber “root out bad be­hav­ior”, Ja­cobs said.

Mar­ket­place an­a­lyt­ics “ex­ists ex­pressly for the pur­pose of ac­quir­ing trade se­crets, code base and com­pet­i­tive in­tel­li­gence”, the let­ter states, though Ja­cobs said un­der ques­tion­ing that the let­ter’s lan­guage was “hy­per­bolic”.

But, he said, the group did en­gage in scour­ing code repos­i­tory GitHub to find “spilled data” from ri­val firms, and en­gaged in ef­forts to ob­tain in­for­ma­tion about driv­ers for ri­val ride-hail­ing com­pa­nies over­seas.

“I did not be­lieve it was patently il­le­gal,” Ja­cobs said. “I had ques­tions about the ethics of it. Be­cause of my per­sonal ethics, it felt overly ag­gres­sive and in­va­sive.”

Ja­cobs also de­scribed a team within Uber that worked to “im­pede, ob­struct or in­flu­ence” in­ves­ti­ga­tions into the com­pany due to var­i­ous law­suits. Com­pa­nies are re­quired to pre­serve and pro­duce doc­u­ments that could be ev­i­dence in lit­i­ga­tion or crim­i­nal in­ves­ti­ga­tions. The prac­tices de­scribed by Ja­cobs would al­low the com­pany to en­gage in ques­tion­able be­hav­ior with­out creat­ing a pa­per trail.

One tac­tic was the use of “nonat­tributable de­vices” to com­mu­ni­cate, Ja­cobs tes­ti­fied. Uber had a third-party con­trac­tor pur­chase lap­top com­put­ers and mo­bile wifi de­vices, which em­ploy­ees could use to com­mu­ni­cate with­out leav­ing traces on Uber’s servers. The team also urged em­ploy­ees to use the ephemeral and en­crypted mes­sag­ing app Wickr, he said.

Ja­cob said that such prac­tices were en­cour­aged by Craig Clark, who was the le­gal direc­tor for se­cu­rity and law en­force­ment at Uber un­til last week. Clark was one of two em­ploy­ees fired by Uber over his role in con­ceal­ing a se­cu­rity breach af­fect­ing 57 mil­lion cus­tomers and driv­ers for over a year. The other was Joe Sul­li­van, the former chief se­cu­rity of­fi­cer, whom Ja­cob said also used the ephemeral mes­sag­ing app.

The let­ter also in­cluded al­le­ga­tions that Ja­cobs re­pu­di­ated on the stand, say­ing that he had only re­viewed it for 20 min­utes be­fore his at­tor­ney sent it. Among those was the al­le­ga­tion that “Uber used the mar­ket­place an­a­lyt­ics team to steal trade se­crets at least from Waymo in the United States,” which Ja­cobs said he did not “stand by”.

Ja­cobs said the team was pri­mar­ily used over­seas, but that it had op­er­ated do­mes­ti­cally to “re­search protest and threat groups tar­get­ing Uber”.

Ja­cobs also al­leged in his let­ter that Uber had hired an em­ployee, Ed Russo, to de­velop its in­tel­li­gence pro­gram by re­cruit­ing hu­man sources within com­pet­i­tive firms. Ja­cobs said that he was at a pre­sen­ta­tion where Russo dis­cussed us­ing “ex-CIA field oper­a­tives skilled in counter surveil­lance” to en­sure the se­crecy of chief ex­ec­u­tive Travis Kalan­ick’s meet­ings with a po­ten­tial ac­qui­si­tion tar­get.

Russo, a se­nior risk and threat an­a­lyst at Uber who was de­scribed as a “former gov­ern­ment em­ployee”, also tes­ti­fied at the hear­ing Tues­day and de­nied many of Ja­cobs’ al­le­ga­tions.

“It’s never been my role to en­gage in the theft of trade se­crets. We never re­cruited sources from within com­pet­i­tive or­ga­ni­za­tions,” Russo tes­ti­fied. Russo said that the anec­dote about Kalan­ick’s se­cret meet­ings was ac­tu­ally drawn from a Au­gust 2016 ar­ti­cle by Bloomberg, and that he had never men­tioned exCIA field oper­a­tives.

Uber did not re­spond to ques­tions from the Guardian about the specifics of Ja­cobs’ al­le­ga­tions.

“None of the tes­ti­mony to­day changes the mer­its of the case,” Uber spokes­woman Chelsea Kohler said in a state­ment. “Ja­cobs him­self said on the stand to­day that he was not aware of any Waymo trade se­crets be­ing stolen.”

In a state­ment, a spokes­woman for Waymo called the new ev­i­dence “sig­nif­i­cant and trou­bling” and wel­comed the trial delay as an “op­por­tu­nity to fully in­ves­ti­gate this new, highly rel­e­vant in­for­ma­tion”.

Waymo sued Uber in Fe­bru­ary, al­leg­ing that the ride-hail com­pany’s ac­qui­si­tion of self-driv­ing startup Otto was ac­tu­ally a scheme to ac­quire se­crets stolen from Waymo by its former em­ploy­ees. Judge Al­sup re­ferred the case to the US at­tor­ney’s of­fice in May – a rec­om­men­da­tion that fed­eral pros­e­cu­tors be­gin a crim­i­nal in­ves­ti­ga­tion.

Uber was sued by Google’s self-driv­ing car spinoff Waymo in Fe­bru­ary, al­leg­ing that the ride-hail com­pany stole trade se­crets. Pho­to­graph: Gene J. Puskar/AP

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