Uber Under Criminal Investigation for Using Greyball Software to Evade Detection

According to two people familiar with the matter, the U.S. Department of Justice has launched a criminal investigation into Uber Technologies Inc.’s [UBER.UL] usage of a software program that assisted its drivers in dodging local transportation authorities.

Uber Under Criminal Investigation for Using greyball

Uber has acknowledged that the program, dubbed “Greyball,” assisted it in locating and eluding law enforcement officers who were attempting to crack down on the service in places like Portland, Oregon, where it had not yet received approval and Uber Under Criminal Investigation for Using greyball.

Shortly after the New York Times reported Greyball’s existence in March, the firm banned its use for this reason, claiming that the technology was designed to verify ride requests in order to protect drivers and avoid fraud. The Times article set off a firestorm of unfavorable press for the business.

The criminal investigation may turn into a serious issue for the business, which is already dealing with a number of recent legal and business problems.

Both the Justice Department and an Uber representative refrained from commenting. Uber’s attorneys informed Portland officials in papers that were made public by Portland last week that Greyball technology was “extremely sparingly” employed in that city prior to the service’s approval in 2015.

It’s unclear what a possible federal criminal offense would entail and how likely it is that someone will face charges. According to the sources, the probe is still in its early phases.

Last Monday, the Bloomberg news agency revealed that there was a federal investigation underway, although it did not characterize it as illegal.

ATTACKING STARTUP, Uber Under Criminal Investigation for Using greyball

A grand jury in Northern California served Uber with a subpoena requesting documentation on the software tool’s operation and its deployment locations, according to a person with knowledge of the request. That suggests that there is an active criminal inquiry. That was corroborated by the second source.

A grand jury’s official request for records or testimony on a possible crime is known as a subpoena. It does not, by itself, imply misconduct or guarantee that legal action will be taken.

According to two sources and a third, the board of the transportation services company has hired Shearman & Sterling LLP, an independent law firm, to carry out an internal inquiry into the events that occurred.

A message requesting comment was not answered by a Shearman spokeswoman.

Uber, a company funded by venture capital, was most recently valued at $68 billion, has a history of being a startup that takes risks.

Over the past six months, it has been hammered by a number of incidents that have cast doubt on the character of Chief Executive Travis Kalanick and prompted him to declare that he required “leadership help.”

CREDIT CARD INFO MINEING

Uber stated in a blog post in March that the technology at the center of the criminal investigation assisted in tagging certain users, causing them to see an altered version of the company’s standard app.

Uber said that Greyball hid the actual whereabouts of its cars in a number of scenarios, such as potential physical threats or the company’s testing of new services.

Included in a larger Uber system known as Violation of Terms of Service, the program examined credit card, device identity, and location data and other elements to determine the validity of a transportation request, according to current and former employees Uber Under Criminal Investigation for Using greyball.

According to a corporate blog post, the technology was utilized in part to stop fraud and shield drivers from danger. Employees at Uber told Reuters that if a ride request was judged fraudulent, the requester would not be picked up and the Uber app would display false information.

Nevertheless, the workers said that the Greyball method was also applied to alleged local officials who might have been trying to punish drivers, seize vehicles, or otherwise stop Uber from functioning.

Uber’s terms of service for app users may have suggested that the system went farther than it actually did. For instance, it mined credit card data to determine whether the owner was a member of a credit union employed by law enforcement and examined social media accounts to determine the probability that the individual was a member of the armed forces.( Uber Under Criminal Investigation for Using)

Regulators who had been unable to stop Uber in areas where it was prohibited after the Times revealed the scheme in March accused the business of blocking their investigations.

After conducting an investigation, Portland transportation officials revealed last week that Uber had utilized Greyball to avoid 16 Bureau of Transportation officers in December 2014, depriving them of numerous rides, before Uber was granted permission to operate in the area.

The city claimed that when Uber returned to the market in April 2015, it discovered no proof that the behavior had been repeated.

Uber claimed that in December 2014, while operating without authorization, it utilized the Greyball technology since it was very worried that its driver partners would suffer financial or other consequences as a result of their driving. (Uber Under Criminal Investigation for Using)

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