The cybersecurity company behind a global IT outage that grounded flights, knocked banks offline and sparked chaos for retailers and media organisations admits compensation talks are inevitable.
An estimated 8.5 million Windows devices were taken offline when a flawed software patch was sent to customers by CrowdStrike on Friday.
The Texas-based company’s Australian president Michael Sentonas apologised on Tuesday, saying “we got this very wrong” and “we understand the disruption and the distress that we caused a lot of people”.
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He said CrowdStrike’s “focus” was getting all customers back up and running, but conceded tough conversations about litigation and potential compensation are coming.
“Those conversations have to happen and will happen. That phase will come after we get our customers remediated,” Sentonas told Sky News.
Under its terms and conditions, CrowdStrike says Australian customers are entitled to compensation in the event of “major failures with the service”.
“For major failures with the service, you are entitled: (i) to cancel your service contract with us; and (ii) to a refund for the unused portion, or to compensation for its reduced value. You are also entitled to choose a refund or replacement for major failures with goods,” the company’s terms and conditions say.
If a failure does not amount to a major failure, customers are entitled to have the issue rectified in a “reasonable time”.
“If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service,” the company says.
While the full cost of the outage — which caused Microsoft Windows to crash and display a blue screen of death — is difficult to quantify, some experts have estimated the impact to businesses globally at over $1 billion, with Business NSW estimating the bill to top $200 million in that state alone.
Australian Industry Group chief executive Innes Willox said it remains to be seen whether businesses would be able to seek compensation, either from CrowdStrike directly or via some form of government redress scheme.
“It’s impacted different businesses and different sectors of the economy in wildly different ways, and the reality is we’re going to be seeing the tailpipe of this for weeks to come,” Willox said.
CrowdStrike’s share price plummeted since the outage, erasing billions of dollars from CrowdStrike’s market value, and pressure is mounting on chief executive George Kurtz to testify before the US Congress with regulatory or punitive action not out of the question.
Australia’s Home Affairs Minister Clare O’Neil said the outage was likely the largest in history and “teething issues” could be felt for weeks.
“I encourage anyone who is travelling, shopping at supermarkets or filling up the car to build in some extra time and be patient with workers who are trying to get systems back online,” O’Neil said.
– With AAP
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