wednesday, 30 august of 2017

DOJ is investigating whether Uber broke the law against foreign bribery

Uber just picked a new chief executive, but the tide of bad news facing the Silicon Valley transportation company isn’t letting up.

The company confirmed Tuesday that the Department of Justice is probing whether managers broke U.S. laws prohibiting bribery of officials in foreign countries.

Uber is cooperating with the investigation, a spokesman Matt Kallman said. The news was first reported by the Wall Street Journal. The DOJ didn’t immediately respond to requests for comment.

The federal bribing investigation is striking in one respect: Large multinationals, such as Walmart and Halliburton, are more commonly the subject of bribery investigations. Silicon Valley startups rarely face this type of scrutiny.

The probe may reflect an aggressive international strategy pursued by the company’s ousted chief executive Travis Kalanick. Under the hard-charging Kalanick, the Uber expanded to 77 countries in just eight years.

The case is also the latest in a long litany of travails confronting the company’s presumptive incoming chief executive, Expedia CEO Dara Khosrowshahi.

Khosrowshahi must contend with the company’s reputation for rule-breaking and for a “bro” culture that is hostile to women and underrepresented minorities. He will have address two federal investigations - the bribery investigation and a probe, launched in May, into whether the company used special software to evade authorities in places where ride-sharing services were banned or restricted.

He must work to regain the trust of drivers after the company admitted it had underpaid them for nearly three years in New York.

And he will also have to continue fighting a major lawsuit against Waymo, the self-driving division of Google, over whether the company stole trade secrets to build its self-driving car program.

The bribery probe is preliminary, according to the Wall Street Journal. Depending on what it finds, the agency could open up a bigger investigation.

International expansion strategies, undertaken by country managers and also by Kalanick himself, often led to controversy. The company recently pulled out of China and Russia in the face of brutal competition from local champions that were viewed favorably by the government. The company was found to have broken transportation laws in South Korea and France, and was recently suspended in the Philippines. Uber is also fighting with European regulators over whether it should be subject to the same rules as regular taxi services.

U.S. rules preventing foreign bribery stem from a Watergate-era law known as the U.S. Foreign Corrupt Practice Act, which prohibits not only the paying of bribes to foreign officials but also the intent to bribe or fuzzy accounting practices.

Payments can include receiving or offering cash or non-cash gifts of value to a foreign official.

It was not known which country or countries were involved in the probe.

(Published by The Washington Post - August 29, 2017)

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