Delta is preparing a major damages lawsuit against CrowdStrike and Microsoft

30 July 2024, 19:19 published

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Delta Airlines has enlisted legal help to seek damages from CrowdStrike and Microsoft after a significant outage earlier this month (via CNBC).

The incident, which happened on July 19, stemmed from a software update by CrowdStrike that led to the widespread failure of Microsoft systems across major industries, such as banking, healthcare and aviation.

An estimated 8.5 million Windows devices had been affected by the update, including many of Delta Airlines’ servers and those of other airlines, leaving thousands of flights grounded.

Delta lawsuit against CrowdStrike and Microsoft

Airlines were hit particularly hard by the outage, prompting the Department of Transportatation to launch an investigation into Delta’s operations amid the disruptions. Overall, the outage cost the airline an estimated $350-500 million, with nearly 7,000 flights canceled and over 176,000 refund or reimbursement requests filed.

By selecting David Boies, an American attorney known for his previous involvement in high-profile cases, Delta is indicating that it could seek significant compensation from the tech firms. Boies represented the US in its antitrust case against Microsoft, and also played an important role in oveturning California’s ban on gay marriage.

While no formal lawsuit has been filed yet, Delta’s plans to pursue damages have already impacted CrowdStrike’s market value. The cybersecurity firm’s stock plummeted a staggering 25% in the two trading days following the outage, reflecting investor concern.

Beyond aviation, insurance firm Parametrix estimated that the incident caused a loss of $5.4 billion among Fortune 500 companies alone, excluding Microsoft. Moreover, other companies may wish to join Delta in seeking compensation from Microsoft and CrowdStrike following the outage, which will only be revealed as companies begin to calculate their losses.