Delta, CrowdStrike and Microsoft mired in legal blame game
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Three companies — leaders in their respective industries — are mired in a public spat over the fallout of July's global IT outage.
Why it matters: The she-said, he-said stories spilling out from Delta Air Lines, cybersecurity giant CrowdStrike and Microsoft have escalated into a blame game full of legal threats — just one repercussion of a world increasingly full of a few key tech dependencies.
Catch up fast: Delta Air Lines CEO Ed Bastian said last Wednesday on CNBC that the biggest U.S. airline by revenue has "no choice" but to pursue legal action against the two tech companies as it stares at an estimated $500 million in damages from lost revenue and refunds stemming from flight delays and cancellations.
- CrowdStrike, which initially triggered the outage to Microsoft windows systems with a faulty system update, hit back on Sunday, sending Delta's lawyer a letter viewed by Axios saying it "strongly rejects any allegation that it was grossly negligent or committed willful misconduct" about the outage.
- And should the airline follow through on its "public threat of litigation ... Delta will have to explain to the public, its shareholders and ultimately a jury why CrowdStrike took responsibility for its actions — while Delta did not."
- CrowdStrike is already facing a proposed class action lawsuit filed by air travelers.
The latest: Microsoft responded with its own letter to Delta Tuesday, detailing alleged communications that Microsoft says shows Delta refusing Microsoft's help, likely because IBM or other tech companies were servicing Delta's downed crew-tracking and scheduling systems.
- "Given Delta's false and damaging public statements, Microsoft will vigorously defend itself in any litigation if Delta chooses to pursue that path," the letter said.
And Wednesday, Delta's legal troubles began as some passengers impacted by cancellations filed a class action lawsuit against the airline, alleging that it "refused or ignored" refund requests despite "previous commitments."
💭 Our thought bubble, via Axios' Eleanor Hawkins: Bastian's CNBC appearance was likely meant to calm the shareholder audience. Its response to the outage affects the "premium" airline brand it has worked hard to build.
The big picture: Of all the airlines, Delta was the slowest to recover from the outage — cancelling about 5,500 flights.
What they're saying: "Public posturing about potentially bringing a meritless lawsuit against CrowdStrike as a long-time partner is not constructive to any party," a CrowdStrike spokesperson tells Axios in an statement.
- "We hope that Delta will agree to work cooperatively to find a resolution."
- Delta did not respond to request for comment.
What we're watching: All three companies have seen their shares fall since the outage.
- Delta is down over 17%, while CrowdStrike is down nearly 25%.
- Microsoft shares have traded more on larger factors impacting Big Tech, including heavy spending on AI initiatives.
