Reservation Counter, an online travel agency, has filed a lawsuit against Expedia Inc., claiming Expedia stole its data worth "millions of dollars of investment," gave it to a competitor, then tried to cover up the data breach.

The lawsuit was filed in U.S. District Court in Ohio on March 31 by TravelPass Group, Reservation Counter's parent company.

Reservation Counter gets the majority of its hotel content from large OTAs like Expedia and Priceline and uses keyword advertising -- bidding on keywords used on search engines to trigger its ads -- as a "critical marketing and sales tool," the lawsuit states.

Over the course of several years, Reservation Counter claims it spent about $30 million developing data sets enabling it to successfully bid against other OTAs in keyword auctions.

In 2009, Reservation Counter entered into an affiliation agreement with the Expedia Affiliate Network, which was renewed in 2013. That gave Reservation Counter access to Expedia's hotel database; it also included a confidentiality agreement between both parties, requiring them to not disclose each other's confidential information to other parties, according to the lawsuit. The agreement also included a clause requiring Reservation Center to cease bidding on names present in a URL owned by an Expedia supplier, if requested to do so by Expedia.

The lawsuit claims Expedia employee Brian Hungria started to leak Reservation Counter data to employees Skip Gibson and Yatin Patel in 2014; Patel would go on to found Hungria allegedly sent 18 months' worth of data to Patel and Gibson.

"With access to Reservation Counter's stolen data at the company's outset, not only held the key to Reservation Counter's success, but also was spared the years and millions of dollars necessary to develop its own data analytics and successful keyword bid strategy," the lawsuit states.

The data assisted in reaching one million bookings in a year, according to the lawsuit, something that took Reservation Counter six years to do.

"Then, to make matters worse, Expedia itself began using Reservation Counter's data for its own purposes, in direct violation of its contractual and statutory obligations to Reservation Counter," the lawsuit states.

Reservation Counter alleged that Expedia used Reservation Counter's data for its own keyword bidding strategy.

The lawsuit additionally accuses Expedia of making Reservation Counter agree to "various anti-competitive restrictions" on its "participation in the keyword search advertising market for hotel rooms," something Reservation Counter said it refused to do, leading Expedia to allegedly cut off access to inventory of certain hotel brands. Reservation Counter said the loss of access to that inventory cost it "tens of millions of dollars in revenue and profits."

The lawsuit claims the data leak caused a large drop in Reservation Counter's growth from over 100% month-to-month in December 2013 to 6% in June 2014, and to below zero after that. Meanwhile, became its "most significant competitor" and Reservation Counter saw increased advertising costs due to the competition.

Overall, the lawsuit claims the data leak cost Reservation Counter over $61 million in lost profits, and also hindered parent company TravelPass' ability to raise capital.

Reservation Counter claims in the suit that though Expedia did learn of the breach "soon after" it occurred, Expedia "chose to actively conceal the breach." The suit claims a former Expedia employee told Reservation Counter about the breach last year.

The suit names three counts against Expedia: trade secret misappropriation, violation of the Utah Uniform Trade Secrets Act (TravelPass is based in Utah) and breach of contract, and seeks an award of damages for each count.

An Expedia spokesperson said the company does not comment on pending litigation.

Correction: Sherman Distin was mistakenly mentioned in Reservation Counter's lawsuit against Expedia. He did not work for, a company that allegedly received stolen data from Expedia.


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