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Rival accuses Google's Waze of stealing traffic data

If proven true, the lawsuit could show the search giant took a wrong turn in its bidding war with Facebook over Waze in 2013.

A competitor to Waze claims in a lawsuit the driving directions app stole its data, unjustly beefing up its product before selling to Google.

In a lawsuit filed Tuesday in a San Francisco federal court, traffic information app maker PhantomAlert claims it discovered the theft when it found its proprietary information on Waze, which Google purchased in 2013 for a little less than $1 billion. Like Waze, PhantomAlert provides information about red light cameras, road conditions and other traffic updates.

"Without any authorization or consent, Waze copied the PhantomAlert database and incorporated the data into the Waze application," lawyers for PhantomAlert wrote in their complaint.

A screenshot of the Waze driving directions app with traffic alerts.

screenshot by Lance Whitney/CNET

If what PhantomAlert alleges is true, the stolen information could have been used to enhance the competing company's value and boost its sales price. What's more, it could call into question Google's haste to purchase the app during a bidding war with Facebook.

Lawyers for the Israel-based Waze suggest Waze might have fallen into a trap worse than a red light camera. PhantomAlert CEO Yosef Seyoum said he stumbled on the evidence of theft when he discovered that fictitious information planted in his own database appeared in the Waze application, right after Google announced its purchase.

"I said, 'What did they do right then, that they got a billion dollar exit?'" Seyoum said. He took a close look at Waze's map to learn what they did to make their product an appealing purchase, and that's when he says he found his own company's fake information, used for testing purposes, in the Waze database.

The Washington, D.C.-based company had inserted fictitious bits of information about points of interest into its database to test their product, Seyoum said. Because they were made up, there was no reason for them to show up in another company's application.

"When I looked at their map, I started seeing some anomalies," Seyoum said. "How could my error or watermark show up on Waze's map?"

After that, he got legal assistance.

The lawsuit seeks payment for the stolen information as well as additional damages meant to punish Waze for stealing the data. The case will rest partly on the quality of proof PhantomAlert can provide. The company's lawyer, Karl Kronenberger, said the company and its lawyers have done an in-depth forensic analysis of the data.

Kronenberger also said they found evidence that Waze was repeatedly stealing information from his client, multiplying Waze's offenses and the possible consequences if the allegations prove true.

A spokeswoman for Google declined to comment.

Seyoum said he thinks Google would be chagrined to learn it had purchased an app that contains information stolen from competitors.

"That's not the message that you want to send all the entrepreneurs like me who are working our fingers to the bone," he said.