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Business Insider

Delta Air Lines is gearing up to demand money following an outage that sent the world, including the airline, into chaos.
The carrier hired star lawyer David Boies to seek damages from CrowdStrike and Microsoft for the July 19 computer outage that forced Delta to cancel about 6,000 flights, CNBC reported on Monday.
Boies has represented Theranos founder Elizabeth Holmes, Al Gore in the 2000 presidential election, and the US government in an antitrust case against Microsoft in 1998.
His law firm, Boies Schiller Flexner, and Delta did not respond to requests for comment.
While no lawsuit has been filed, Delta plans to seek compensation from CrowdStrike and Microsoft, CNBC reported.
Delta’s stock was little changed after closing on Monday, but CrowdStrike’s stock was down 5.5 per cent in after-hours trading.
Earlier this month, CrowdStrike disrupted business globally, after a defect in a software update from the cybersecurity firm caused many thousands of Microsoft computer systems to shut down.
Analysts estimated that Delta, which was one of the worst-hit airlines, will suffer a hit to its earnings of US$350 million to US$500 million this quarter because of reputational damages and ticket refunds, Bloomberg reported last week.

But Delta and its new team of Boies-led lawyers might not be able to get much from CrowdStrike, experts say.
The cybersecurity firm’s terms and conditions say that CrowdStrike doesn’t have to shell out anything more than a refund.
The terms for CrowdStrike’s Falcon security software – which is used by companies and government agencies around the world – limit liability to “fees paid”.
This means that if companies like Delta had a claim for damage or lost revenue, CrowdStrike would only pay those companies the cost of the software, Elizabeth Burgin Waller, the chair of the Cybersecurity & Data Privacy practice at Woods Rogers, said earlier this month.
Even individuals hoping to seek damages from CrowdStrike through proposed class action lawsuits may have little luck.
Mauricio Sanchez, a senior director at a tech market research firm, Dell’Oro Group, said that CrowdStrike may not have to pay at all.
“While it will be a miserable summer for CrowdStrike lawyers, as they defend themselves from customers with torches and pitchforks, I don’t see CrowdStrike having to pay much, if any, compensation,” Sanchez told trade publication Fierce Network last week.
A recent case – this one about hacking, not just a software update gone wrong – offers some precedent for how big customers like Delta could fare in court.

In 2020, hackers broke into Texas-based SolarWinds’ systems and added malicious code to the company’s software system. More than 30,000 customers then were unwittingly sent software updates that included the hacked code, which led to hackers spying on company and government organizations.
Earlier this month, a US judge dismissed most of a Securities and Exchange Commission lawsuit accusing SolarWinds of defrauding investors by hiding security weaknesses.
Between customer agreements that favour CrowdStrike and SolarWinds largely beating the SEC, CrowdStrike stands a good chance in court, Sanchez said.
Andrew Selbst, an assistant professor at UCLA School of Law, told Harvard Law Today last week that customers could sue over negligence, a common class action lawsuit.
“Ultimately, they’re difficult to win,” he said.
Another consequence for CrowdStrike could be regulation, especially from the Federal Trade Commission.
“The FTC has a pattern of settling with these companies and keeping them under a consent decree for 20 years or so,” Selbst said.
“But with the FTC, you don’t get individual customers receiving damages or compensation. This is just a regulatory regime, and they receive fines payable to the federal government.”
This story was first published by Business Insider


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United States

Delta Air Lines hires lawyer to seek damages from CrowdStrike, Microsoft over software outage

Delta Air Lines planes sit parked at Hartsfield-Jackson Atlanta International Airport on Sunday in Atlanta. Photo: TNS

Travellers stand in line at a Delta Air Lines counter during a global technology outage at Reagan National Airport on July 19 in Arlington, Virginia. Photo: AP

Departure and arrival boards at Los Angeles International Airport. Delta Air Lines Inc. is expected to take a sizeable financial hit this quarter from the system breakdown that led to thousands of cancelled flights and prompted a federal investigation of the carrier’s response. Photo: Bloomberg

Asia-Pacific faces fallout from CrowdStrike outage: ‘It will continue to happen’

The CrowdStrike offices in Sunnyvale, California. In what will go down as the most spectacular IT failure the world has ever seen, a botched software update from cybersecurity firm CrowdStrike crashed countless Microsoft Windows computer systems globally. Photo: Bloomberg

A computer breakdown created inconvenience for AirAsia passengers at Hong Kong International Airport, a day after some airlines were affected by a global IT service outage. Photo: Xiaomei Chen

An impacted check-in terminal is seen at Ronald Regan Washington National Airport on July 19. Photo: TNS

People line up to use ATMs in Istanbul, Turkey on July 19. The global IT outage on Friday caused chaos to services and businesses worldwide. Photo: Xinhua

Delta Airlines cancelled and delayed hundreds of additional flights as problems from the outage caused by the Crowdstrike software update continued for days. Photo: AFP

CrowdStrike blames defect in content update for epic global tech outage

CrowdStrike said a bug in a quality-assurance tool it uses to check updates for mistakes allowed flawed data out to customers, causing last week’s meltdown. Photo: Shutterstock

CrowdStrike outage cost economy ‘tens of billions of dollars’, and firms want to recoup losses

A departure board shows canceled flights at the Detroit Metropolitan Wayne County Airport on July 20, 2024. Photo: AFP

Delta passengers try to locate their luggage after multiple flight cancellations at Hartsfield-Jackson Atlanta International Airport on Monday. Photo: Getty Images / AFP 

A traveller looks at the information board at the McNamara terminal at the Detroit Metropolitan Wayne County Airport on July 21. Photo: AFP

CrowdStrike-Microsoft outage: Chinese cybersecurity firms take victory lap

The CrowdStrike offices in Sunnyvale, California, on July 19, 2024. Photo: Bloomberg

Visitors tour the Chinese internet security firm Qihoo 360 booth at the World 5G Convention in Beijing on November 21, 2019. Photo: Xinhua

Hong Kong needs plan to tackle global computer system shutdowns, new cybersecurity chief says

Hong Kong government bureaus and departments involve at least 3,000 computer systems, an official says. Photo: Jelly Tse

 Tony Wong is commissioner of the new Digital Policy Office. Photo: Yik Yeung-man

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The outage forced Delta to cancel 6,000 flights, potentially costing US$350 million to US$500 million


The outage forced Delta to cancel 6,000 flights, potentially costing US$350 million to US$500 million.
