Microsoft And Expedia Slapped With Second Lawsuit

For the second time in just over a month, online travel site Expedia.com, which is majority-owned by Microsoft, has been sued in a federal court.

The two companies were sued by Cahners Travel Group, a division of giant British/Dutch publishing company Reed Elsevier, for breach of contract, unfair competition and other allegations.

The Newark, New Jersey-based Cahners — part of Cahners Business Information — disclosed that the suit filed in a U.S. District Court in New Jersey was sealed, but that Expedia revealed it publicly when filing papers with the SEC for its recent initial public offering.

Cahners said it signed a deal with Expedia and Microsoft in 1998 to build “the Internet’s most comprehensive database of hotel information.” The deal called for Cahners to be the exclusive provider of advertising sales for the hotel directory.

Cahners accuses Expedia and Microsoft of violating that agreement. It also claims a misappropriation of its proprietary database and interference with business relationships in its suit.

A Microsoft spokesman deferred to Expedia, which was unavailable for comment Tuesday morning. A Cahners attorney declined to comment on the suit, referring to the statement.

Familiar Scenery

Microsoft and its subsidiaries are likely getting a little fed up with the whole courthouse scene of late. The parent company, of course, was declared a monopoly by federal judge Thomas Penfield Jackson earlier this month.

Expedia was sued in a federal court last month by priceline.com, which claims a patent infringement of its hotel price matching system.

In a strongly worded statement, priceline said that Microsoft CEO Bill Gates told its CEO, Jay Walker, that Microsoft had little regard for patents and would not let them stand in its way of developing its business.

Gates and Walker met to discuss Microsoft’s possible investment in priceline, but the talks soured, according to priceline’s version of events.

Expedia recently introduced its own hotel price-matching system. The company was split off from its parent last week in a highly successful IPO that had it valued as high as $1.75 billion (US$) on the first day of trading.