Last Friday, the Northern District Court of California finally posted a long-awaited document, a letter written by the lawyer of an ex-Uber security employee. It was a doozy, a 37-page compendium of alleged criminal and unsavory activity witnessed by that employee, Ric Jacobs, while he worked at the company in 2016 and 2017.
The letter came to light last week (after much legal tussling) as part of an ongoing lawsuit between Uber and Waymo, Alphabet’s self-driving car spinoff. Waymo alleges Anthony Levandowski, a former employee, made off with trade secrets when when he left to found his own company, then brought those secrets to Uber when it acquired the startup. It’s bad news for Uber in this legal fight, but the damage may not stop there.
That’s because Uber is fighting legal battles on myriad fronts, and the 37-page Jacobs letter is full of potential ammunition against it. The letter alleges the company coordinated an operation to hide documents from lawyers and regulators. It speaks of efforts to “hack” competitors’ apps, to steal trade secrets, data, passengers, and drivers. It claims Uber went to great lengths to evade and even bribe government officials. It accuses the company of violating California state law by recording a phone call about sexual harassment allegations without its participants’ consent.
So don’t be surprised if many lawyers—federal prosecutors, lawmakers, those who have already filed lawsuits against Uber—are doing some reading. “Investigators have opened the lid off the trash can, and they’re finding all kinds of apple cores and corn cobs and paper plates,” says Timothy Heaphy, a former federal prosector and white collar defense specialist at the law firm Hunton & Williams.
Uber’s potentially saving grace? It’s unclear how much of the letter is true. Jacobs was in a legal dispute with the company when he wrote the letter, after all, and he had obvious motivation to make Uber look bad. Jacobs portrays himself as a whistleblower, but Uber says he’s an extortionist. An Uber spokesperson said last week the company hadn’t substantiated all the claims in this letter. Jacobs himself walked back portions of the letter while testifying in court earlier this month, saying he did not believe Uber had set up a team dedicated to stealing trade secrets, or that Waymo was a particular target. (Jacobs said he had not read his lawyer’s letter closely enough because he was on vacation with his wife.) Still, Uber ultimately paid Jacobs $4.5 million as a “consulting fee,” and another $3 million to his lawyer.
But even if some of Jacobs’ allegations are at least partly true, that’s great for federal investigators currently running probes into Uber, and looking for chances to make their names by taking down a big, bad Silicon Valley unicorn.
To understand who should be interested in the Jacobs letter, let’s take a quick trip through Uber’s current legal qualms. An exhaustive report by Bloomberg reporter Eric Newcomer finds federal investigators have opened at least five probes against the company.
The first is an investigation into criminal trade secret theft, which comes out of the Waymo lawsuit. The Jacobs letter’s section on Waymo alleges an Uber employee made oblique references to theoretical, secretive meetings between CEOs—perhaps the sorts of meetings that ex-Googler Levandowski and then-CEO Travis Kalanick might have used to hide conspiracy. The Uber employee testified that the presentation had in fact been a light-hearted primer on basic info protection measures, like keeping your computer and phone secure and not discussing private business in a restaurant. But if proven true, the letter’s references could help investigators weave together a narrative of secretive, shifty behavior.
Probe number two is a federal investigation into Uber’s pricing. Uber allegedly used specially built software to offer different prices to American riders who might be willing to pay more for trips—and then hid those price jumps from drivers. This could violate federal price transparency laws. The Jacobs letter alleges Uber stole trade secrets concerning competitors’ pricing and driver incentives structures, which could back up those suspicions.
Next up, a look into Greyball, the software (first exposed by The New York Times), which Uber show flagged users a dummy version of the app. The Jacobs letter makes a few indirect references to use of a Greyball-like program. It alleges one Uber team used untraceable devices to store intelligence on politicians, regulators, law enforcement, and taxi organizations, the kinds of people who might be interested in catching Uber running where and when it wasn’t supposed to. And it alleges the existence of an internal “playbook” for combatting regulatory and reinforcement activities in at least one country. (Greyball was reportedly used in the US, France, Australia, China, and South Korea.)
Probe three: Uber confirmed to the The Wall Street Journal in August that federal investigations were searching for Uber violations of laws prohibiting the bribery of foreign officials. The Jacobs letter notes the ex-Uber employee “reasonably believed the that bribery of foreign officials was taking place.” It alleges Uber artificially inflated wages paid to third party vendors in order to purchase ill-gotten information on politicians’ leanings on regulations.
The fifth and final (well, as far as we know) federal inquiry looks into “Hell”, Uber’s program to scrape data from competitor Lyft and gain insight into its drivers’ behavior. A judge dismissed a Hell-related class action lawsuit against Uber in August, but the company confirmed the FBI is investigating the program this fall. The Jacobs letter alleges Uber teams found ways to pull competitors’ confidential data without alerting them to the the theft. The teams also allegedly impersonated riders to create a database of competitors’ driver’s names, license plate numbers, and vehicle makes.
Those are just the federal investigations in the US. When London pulled Uber’s operating license this fall, it cited Greyball as one reason the company was no longer welcome. (Uber has appealed the decision, the case will be heard ind the new year, and its drivers continue to work there in the meantime.) Class action lawsuits—by taxi drivers, riders, and drivers themselves—are piling up, and the Jacobs letter could, theoretically, help them make all their cases.
And, it could launch a few lawsuits of its own. “To the extent that somebody now has a cause of action they may not have had before, it gives them evidence,” Peter Toren, a former federal prosector and now a trade secrets litigator, told WIRED last week. It’s never fun to have your company’s dirty laundry tossed about in public. But when there are lawyers involved, it could be downright dangerous.
© 2018 Condé Nast. All rights reserved.
Frank’s source: https://www.wired.com/story/uber-waymo-jacobs-letter/
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