A federal judge made public late Friday a letter Uber Technologies Inc. had paid $7 million to keep quiet, laying out in detail the company’s alleged corporate espionage program, including wiretapping, hacks, bribery and Central Intelligence Agency–trained spies deployed in the furtherance of its ambition to dominate the ride-hailing industry worldwide.
The letter, drafted by a lawyer for ex-Uber employee Richard Jacobs, spurred some of the revelations that became public during a lively Nov. 28 hearing in a San Francisco courtroom before Judge William Alsup. They surround the Threat Operations unit at Uber, which existed for the express purpose of using unlawful and unethical means among other tactics to gain an edge over rivals and fool regulators, according to the letter.
Threat Operations had a culture “of achieving business goals through illegal conduct even though equally aggressive legal means were available to achieve the same end,” according to the letter. The document offers new specifics about the means and methods Uber used to conduct its clandestine behavior and protect itself from litigation, such as the battle it is currently waging with Waymo.
In a Nov. 29 email to employees, Uber Chief Executive Dara Khosrowshahi wrote, “With regard to the allegations outlined in [Richard] Jacobs’ letter, I can tell you that we have not been able to substantiate every one of his claims, including any related to Waymo. But I will also say that there is more than enough there to merit serious concern.”
Khosrowshahi, a former Expedia chief executive, took the top job at Uber in August after former CEO Travis Kalanick resigned amid multiple scandals.
Filed earlier this year, the Waymo lawsuit accuses a different ex-Uber employee, Anthony Levandowski, of stealing 14,000 confidential documents and using the trade secrets contained in them to bolster Uber’s self-driving program. Waymo has said it is seeking $1.9 billion in damages from Uber, which has denied the allegations.
The lawyer-drafted Jacobs letter was part of an effort to gain $21 million in compensation from Uber, according to a person familiar with the matter.
The letter states that Jacobs knew Uber had used the corporate intelligence unit to steal trade secrets “at least” from Waymo in the U.S. But, testifying in court during the November hearing, Jacobs said that he did not have any information that would indicate Uber used its espionage teams to steal trade secrets from Waymo.
He said that his lawyer had written the letter — which, he said, he took 20 minutes to review while on vacation in Chicago with his wife — and that it contained “hyperbolic language.” There were passages in the letter, Jacobs said, that he would “not have stated in the same manner.”
Jacobs’s attorney wrote that his client left Uber because the company allegedly created a situation that was so hostile at the office, Jacobs had no choice other than to resign after voicing concerns over the Threat Operations group’s activities.
Uber ultimately settled with Jacobs for $7 million, of which his lawyers received $3 million, and Jacobs, the remaining balance. As part of the agreement Jacobs agreed not to disparage the company in public, including releasing the letter, but is still able to testify in court.
The Jacobs letter offers an expanded view of the claims outlined in court and accuses Uber of violating several federal and California state laws, among other allegations. It says that the company used a contractor to deploy hacked phones and signal-interceptor equipment to collect call metadata from communications among rivals, regulators and elected representatives.
The company said last month that its security unit deployed surveillance against rivals but has since been ordered to stop.
The claims also include bribing foreign officials in countries redacted from the now-public document. The Threat Operations group also allegedly hacked into rivals’ systems to collect driver data, among other allegations.
“While we haven’t substantiated all the claims in this letter — and, importantly, any related to Waymo — our new leadership has made clear that going forward we will compete honestly and fairly, on the strength of our ideas and technology,” Uber spokesman Matt Kallman said in a statement.
Differences between corporate espionage, which is illegal, and corporate intelligence gathering aren’t always black and white, Jo-Ellen Pozner, a professor of management and ethics at Santa Clara University’s Leavey School of Business, previously told MarketWatch, “It’s an ‘I know it when I see it,’ ” she said, adding that Uber’s case is clear: Its behavior is unethical at best and potentially criminal at worst.
While both Uber and Google use self-destroying messages — Google has made “off the record” chats policy for any regular company business since 2008 — Uber employees took extra measures to obtain devices not tied to the company networks and use them for allegedly illicit activity such as espionage. Waymo said in a court filing that it has not found evidence of such activity within its organization.
On Friday, a court employee released a 19-page opinion that indicated Uber should have produced the Jacobs letter when requested by Waymo lawyers, which may result in penalties for Uber’s legal team.
The civil suit is slated to go to trial in February.
Through a spokeswoman, in an emailed statement Waymo said, “Uber improperly withheld the Jacobs Letter, which exposes the extreme lengths [to which] it was willing to go both to get a leg up on competition and hide evidence of bad acts. Separate and apart from the letter, Waymo has accumulated significant evidence that Uber is using stolen Waymo trade secrets, including copying aspects of Waymo’s LiDAR designs down to the micron, and we look forward to trial.”
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