Waymo v. Uber: Letter exposes depths of alleged espionage

From burner phones to secret servers to disappearing-message apps, the details filling a 37-page letter released to the public Friday sound more like something out of the Bourne movie series than the inner workings of Uber.

The letter was written by the attorney for Richard Jacobs, a former Uber employee who worked as the ride-hailing company's manager of global intelligence. What's now known as the "Jacobs letter" has become the center of the Waymo v. Uber lawsuit.

Even without the letter, the lawsuit conjures up a spy movie. It pits two multibillion-dollar companies against each other over the alleged theft of trade secrets involving self-driving cars. Waymo, the autonomous-vehicle unit of Google parent company Alphabet, claims Uber's former star engineer stole 14,000 "highly confidential" files to develop its own technology. Uber calls the claim "baseless."

"With regard to the allegations outlined in Ric Jacobs' letter, I can tell you that we have not been able to substantiate every one of his claims, including any related to Waymo," Uber's new CEO, Dara Khosrowshahi, wrote two weeks ago in an email to employees, which was seen by CNET. "But I will also say that there is more than enough there to merit serious concern."

The lawsuit is one of a number of issues for Uber, which has been plagued by problems over the past year, including scandals that led to the crumbling of its executive leadership and five separate federal inquiries into the company. If Uber is found to have pilfered the files in the lawsuit, it may be forced to halt its autonomous-vehicle program and hand nearly $2 billion to Waymo.

The case was set to go to trial earlier this month but was delayed until February because of the revelation of the Jacobs letter. Judge William Alsup, who's presiding over the lawsuit in District Court for the Northern District of California, learned of the letter in late November from the US Department of Justice, which is carrying out a separate criminal investigation into Uber.

"We're going to have to put the trial off, because if it is true -- if even half of what's in that letter is true, it would be a huge injustice to force Waymo to go to trial and not be able to prove the things that are said in that letter," Alsup said last month. 

So, what's in the letter?

Before now only a select few people had seen the full Jacobs letter. It's complete with cloak-and-dagger allegations that range from "illegal intelligence gathering" to using specific devices to hide the creation and destruction of corporate records. Even though it's filled with redactions, it still gives a glimpse into Uber's alleged tactics to obtain trade secrets and destroy evidence.

"These tactics were employed clandestinely through a distributed architecture of anonymous servers, telecommunications architecture, and non-attributable hardware and software," the letter reads. 

It goes on to allege that Uber employees educated the company's Pittsburgh-based autonomous-vehicle team "on using ephemeral communications, non-attributable devices, and false attorney-client privilege designations with the specific intent of preventing the discovery of devices, documents, and communications in anticipated litigation." 

Much of what's in the letter doesn't relate to the Waymo v. Uber lawsuit. It goes through Jacobs' work history, which included counternarcotics operations in Colombia and two consecutive battlefield assignments in Iraq. It also outlines Uber's counterintelligence team formed in March 2017 to identify "aggressive operations targeting Uber and to strike back at competitors." 

Jacobs alleges that Uber used "non-attributable" hardware to store information it collected from politicians, regulators, law enforcement agencies, taxi companies and labor unions. And the letter goes into detail about "illegal wiretapping," "illegal hacking" and "espionage." 

Uber has said that Jacobs was out to extort the company with his letter. The company paid him $4.5 million, among other costs, in a settlement agreement in August to avoid litigation. The claims in Jacobs' letter haven't yet been proven, but Judge Alsup seems to believe they're plausible enough that Waymo should have a chance to investigate the allegations related to the lawsuit.

An Uber spokesman said in a statement that "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."

One of the people Jacobs reported to at Uber was Joe Sullivan, the company's former chief security officer, who resigned last month after it was revealed Uber paid hackers $100,000 to keep quiet about a data breach. Sullivan said he didn't witness any wrongdoing while at Uber.

"From where I sat, my team acted ethically, with integrity and in the best interests of our drivers and riders," Sullivan said in a statement to CNET.

Separately, a court-ordered Special Master report released Friday examined whether Uber should've handed over the Jacobs letter sooner. It concluded that because of Jacobs' allegations regarding issues related to the theft of Waymo's trade secrets, Uber should have disclosed the letter months ago.

"Uber improperly withheld the Jacobs letter, which exposes the extreme lengths it was willing to go both to get a leg up on competition and hide evidence of bad acts," a Waymo spokeswoman said in a statement. "Separate and apart from the letter, Waymo has accumulated significant evidence that Uber is using stolen Waymo trade secrets ... and we look forward to trial."

First published Dec. 15 at 3:52 p.m. PT.
Update, Dec. 16 at 2:27 p.m. PT: Adds comment from Waymo spokeswoman.

The Smartest Stuff: Innovators are thinking up new ways to make you, and the things around you, smarter.

iHate: CNET looks at how intolerance is taking over the internet.