Delta Hires High-Powered Attorney to Sue Microsoft and CrowdStrike Over Software Outage
Delta Air Lines, facing millions in losses due to a massive software outage that crippled its operations and caused thousands of flight cancellations, has hired renowned attorney David Boies to seek damages from Microsoft and CrowdStrike. This move signals a significant escalation in the fallout from the July software update issued by CrowdStrike that caused a global tech outage, impacting businesses across a wide range of industries.
Key Takeaways:
- Delta is taking legal action against Microsoft and CrowdStrike, seeking compensation for the significant losses incurred due to the outage.
- The software update from CrowdStrike on July 19 led to a "historic outage of Microsoft systems," disrupting numerous sectors and causing widespread chaos for airlines.
- Boies, a prominent attorney known for high-profile cases, will be representing Delta in the legal battle.
- The outage is estimated to have cost Delta between $350 million and $500 million, and the airline is grappling with over 176,000 refund or reimbursement requests.
- CrowdStrike has seen its stock plummet following the incident, with concerns about the company’s business practices surfacing.
The Software Outage and Its Impact
On July 19, a software update rolled out by CrowdStrike, a cybersecurity firm, triggered a chain reaction that brought down critical Microsoft systems worldwide. Airlines were among the hardest hit, with Delta Air Lines bearing the brunt of the disruption. Thousands of Delta flights were canceled, causing considerable inconvenience for passengers and massive logistical headaches for the airline.
The Department of Transportation has launched an investigation into Delta’s handling of the situation, highlighting the severity of the disruption and the potential regulatory scrutiny facing the airline.
Delta’s Response and Legal Action
Facing substantial financial losses and logistical nightmares, Delta has taken a decisive step by hiring David Boies, a renowned attorney known for his expertise in high-profile cases. Boies, the chairman of Boies Schiller Flexner, has a reputation for winning significant victories, including representing the U.S. government in its landmark antitrust case against Microsoft.
While no formal lawsuit has been filed, Delta’s decision to engage Boies indicates its firm intention to seek compensation from both Microsoft and CrowdStrike for the damages incurred during the outage.
Financial Fallout from the Outage
The financial impact of the software outage has been staggering. Delta’s estimated losses range from $350 million to $500 million, a significant blow to the airline’s bottom line. The company is now facing a flood of refund and reimbursement requests, with over 176,000 already submitted.
CrowdStrike, the provider of the software update that triggered the outage, has also suffered significant consequences. The company’s stock price plummeted in the days following the incident, losing almost a quarter of its value. Investor confidence in the company has wavered, raising concerns about its business practices and its ability to ensure the integrity of its software updates.
Insurance Startup Parametrix estimates a total loss of $5.4 billion for Fortune 500 companies as a result of the CrowdStrike incident, excluding the costs incurred by Microsoft. This staggering number underscores the widespread impact of the outage and the potential for substantial financial liabilities for the companies involved.
The Future of the Case
It remains to be seen how the legal battle between Delta, Microsoft, and CrowdStrike will unfold. Boies’ reputation for aggressively pursuing cases suggests that the legal proceedings could be lengthy and potentially contentious.
The outcome of the case has significant implications for all parties involved. Delta is seeking compensation for its financial losses, while Microsoft and CrowdStrike face the potential for substantial liability, reputational damage, and legal precedent setting consequences.
The software outage and its aftermath highlight the vulnerabilities of interconnected systems and the potential for cascading disruptions in today’s digital world. This incident underscores the critical importance of robust cybersecurity measures, thorough testing of software updates, and effective communication to mitigate potential risks and manage the fallout of such events.
