Countersuit Filed against Infogroup

Vin Gupta's Database LLC has filed its expected countersuit against his former company Infogroup, alleging sabotage, interference and promotion of 'false rumors' by a company it says is 'not competitive in the marketplace'.

It's two months since Infogroup sued its founder and former CEO Gupta for illegal practices including the alleged theft of its database. Gupta left the firm in 2008 after being dismissed as Chairman following an investigation which found him guilty of 'excessive spending'; talked about the possibility of buying it back and taking it private; made an estimated $101.6m from its sale in July 2010; and launched Database 101 shortly afterwards.

Infogroup claims that Database101 obtained its database from former employees and used it illegally, a claim backed by the former's tactic of including a made-up company called 'Test Order' which days after its addition was sent an advertising postcard by Database101 - Gupta explains this by suggesting that salespeople from Infogroup set this up by placing bogus orders with his new firm. Database101 is also accused of using Infogroup's confidential customer database and poaching staff with the use of confidential information.

DatabaseLLC, which does business as Database101, infofree and AtoZ Databases, states in its Counterclaim charges that Infogroup has interfered with its operations and competed unlawfully: that it 'urged its employees to sabotage the Database101 website with thousands of orchestrated hits' including 'over 8,000' (?) visits to the AtoZ and infofree web sites; resorted to 'tortious interference' with Database101's relationship with its customers and prospective customers to cover up its own shortcomings; lured away its top software engineer despite a confidentiality agreement; and used 'orchestrated email' to Database101 customers and prospects making disparaging statements about its products and services.

The counterclaim makes a number of statements surrounding the 'obsolescence' of Infogroup's services and business model, claiming that Database101's use of cloud technology and SaaS principles put it a generation ahead of the older company and suggesting that Database101 therefore - contrary to the claims made in the original suit - 'has no desire to mimic or repeat Infogroup's costly methodologies, because Infogroup's business plan is obsolete and it is not competitive in the marketplace.' Among the claimed advantages of the newer company are superior analytics and selection capabilities.

'Information about businesses or people is ubiquitous and inexpensive' says Gupta, adding that value is created by proprietary analytics and modelling which enable customers to make better use of information. He concludes: 'Since Infogroup can't compete in the marketplace, they have decided to use lawsuits, false rumors and dirty tricks to demolish competition and sabotage their operations. Of course, we will fight this vigorously in the courts. We will protect the livelihoods of our 50 new employees and the potential we see for hundreds of new jobs we plan to create next year.'

Web sites: www.infogroup.com and www.database101.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.