Uber employed espionage unit to steal rivals’ secrets — is that legal?
Uber Technologies Inc. operated an ethically questionable clandestine unit dedicated to stealing trade secrets and competitive intelligence from rivals, edging up to and possibly crossing the line between allowable corporate intelligence-gathering and illegal espionage.
Details of Uber’s corporate espionage unit, called the Marketplace Analytics team, were exposed in a 37-page letter from an ex-Uber security employee to the company’s legal counsel that has been entered into evidence in the company’s legal battle with Alphabet Inc., according to media reports. Launched by Waymo in early 2017, the civil action alleges former Uber employee Anthony Levandowski stole 14,000 confidential documents from Alphabet GOOGL, -0.81% GOOG, -0.65% autonomous-car subsidiary Waymo while he worked there.
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The revelations arrived days before Uber was set to face off against Waymo after months of legal wrangling over allegedly stolen technology that Waymo says Uber used to augment its self-driving vehicle division. On Tuesday, a day before jury selection was set to begin in San Francisco, Judge William Alsup delayed the trial indefinitely as a result of the letter given to him by the U.S. Attorney’s office, which he had asked to launch a criminal probe into the allegations of trade-secret theft made by Waymo against Uber.
Written by ex-Uber cybersecurity employee Richard Jacobs’ attorney, the letter outlines how Uber trained employees how to “impede, obstruct or influence” legal investigations. And the letter, read in part in court, said that Uber sent executives to Pittsburgh, where it is developing self-driving vehicles, to train them to prevent the company’s potentially unlawful activity as well as its surveillance efforts from being exposed in legal proceedings.
While the full scope of Uber’s clandestine activities within its Marketplace Analytics unit aren’t known, the fact that it attempted to cover up or delete evidence of its actions suggests that the company was engaged in unethical and possible illegal activity, according to an expert.
Differences between corporate espionage, which is illegal, and corporate intelligence gathering aren’t always black and white, said Jo-Ellen Pozner, a professor of management and ethics at Santa Clara University’s Leavey School of Business.
“It’s an ‘I know it when I see it,’” she said in a telephone interview Tuesday.
In her view, the best way to determine what is intelligence and what is espionage is the tactics and means of collection. In general, Pozner said, competitive intelligence involves gathering data on competitors from publicly available sources or through legitimate activities that are fully disclosed. Often that includes news stories, patent filings and other public documents, but it could also mean using informants, though Pozener draws a line at paying such people.
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“They may or may not answer and most of the time are likely to give public information,” she said, adding that it is a typical part of doing business in the U.S.
By contrast, corporate espionage is less public, less above board, and more likely to involve things hidden, she said. “It might involve people going undercover, paying off informants, some kind of techno-spying, like when they’re hacking into other companies,” she said.
In Uber’s case, Pozner said that by the time a company is taking measures to cover its tracks by using self-deleting messages, it has crossed a line between competitive intelligence and espionage. “If you feel like you need to do something to cover your tracks, you’re doing something unethical,” she said.
Even one employee conducting corporate espionage, Pozner said, is likely to indicate that there’s at least some level of executive knowledge or indifference. “It’s almost never the case that someone takes it on their own initiative to conduct damaging activities on behalf of the firm without approval,” she said.
Alphabet class A stock closed down less than 1% to $ 1,063. The stock is up 34% this year, as the S&P 500 index SPX, +0.98% is up 16%.