Delta Airlines has hired prominent attorney David Boies to seek damages from CrowdStrike and Microsoft following an outage this month that caused millions of computers to crash, leading to thousands of flight cancellations. CrowdStrike shares fell as much as 5% in extended trading after the news broke, while Microsoft’s stock remained relatively unchanged. The outage on July 19 was caused by a software update from CrowdStrike that resulted in a historic outage of Microsoft systems, impacting numerous industries. Airlines were particularly affected, with Delta experiencing widespread flight disruptions and service failures. The Department of Transportation is investigating the incident.
While no lawsuit has been filed yet, Delta plans to seek compensation from Microsoft and CrowdStrike to cover the estimated $350 million to $500 million in losses incurred due to the outages. The airline has received over 176,000 refund or reimbursement requests following almost 7,000 canceled flights. Boies, known for his work in high-profile cases such as the U.S. government’s antitrust case against Microsoft and the overturning of California’s ban on gay marriage, has been enlisted by Delta to represent them in this matter. He has also worked with controversial figures such as Harvey Weinstein and Elizabeth Holmes.
In response to the incident, CrowdStrike lost nearly a quarter of its value in just two trading days due to concerns about the company’s business outlook following the outage. A report from insurance startup Parametrix estimated the total loss due to the CrowdStrike incident at $5.4 billion for Fortune 500 companies, excluding Microsoft. The exact details of the damages sought by Delta from CrowdStrike and Microsoft have not been disclosed, but it is clear that the airline is seeking compensation for the significant financial and operational impact of the outages.
Microsoft, which was also affected by the outage caused by the CrowdStrike software update, has not faced as much backlash in the market as CrowdStrike. While Delta’s hiring of Boies to pursue legal action against both companies may have implications for their stock performance in the future, Microsoft’s shares remained relatively stable following the news. The Department of Transportation’s investigation into the outage and its impact on the airline industry will likely shed more light on the extent of the damage caused by the incident and the responsibility of the parties involved.
It remains to be seen how the legal proceedings initiated by Delta against CrowdStrike and Microsoft will unfold and what the outcome will be. The airline’s decision to seek damages for the losses incurred due to the outage reflects the significant impact that technology failures can have on large corporations and their operations. As the investigation into the incident continues and the parties involved present their cases, the legal and financial implications for both CrowdStrike and Microsoft could be substantial. The involvement of a high-profile attorney like David Boies adds another layer of complexity to the situation and underscores the seriousness of the issue for all parties involved.
In conclusion, the fallout from the outage caused by the CrowdStrike software update continues to reverberate through the airline industry and the tech sector. Delta’s decision to pursue legal action against CrowdStrike and Microsoft highlights the significant financial and operational impact of the outages, with the airline seeking damages of hundreds of millions of dollars. The involvement of attorney David Boies in the case and the potential for a lengthy legal battle add further uncertainty to the situation. As the investigation unfolds and more details emerge, the implications for both companies and the broader industry will become clearer.
