List company Database101.com filed a countersuit against data giant Infogroup alleging it used unethical business practices to sabotage the 14-month-old company. The countersuit is in response to a September lawsuit filed by Infogroup, accusing Database101.com founder Vinod Gupta of stealing confidential Infogroup information and using it to develop Database101.com’s client base. Gupta also founded Infogroup.
The countersuit was filed on Nov. 18, and alleges Infogroup urged employees to sabotage Database101 by pretending to be prospects, registering with fake names and qualifying for a free business leads promotion.
“When we started our company we ran an offer of 100 free sales leads,” Gupta told Direct Marketing News. “Infogroup employees came to our site 16,000 times and bombarded our website. They told their employees to register there by using fake names to claim these leads.”
The suit also claims Infogroup employees sent emails to Database101.com customers and prospects, claiming “all sorts of false statements and misrepresentations to malign our name,” said Gupta.
Other accusations include Infogroup’s alleged interference with Database101’s relationship with customers and prospects in order to cover up its own shortcomings and Infogroup’s poaching of Database101’s top software engineer, who had signed a confidentiality agreement with Gupta’s company.
Gupta said Infogroup’s September lawsuit was an act of “bullying” and that the company’s senior management has “an obsession” with him.
“We’re going to prove that there are financial damages from their actions,” he said. “We survived [their actions], but we knew what was going on. We talked to our lawyers, and we decided to let it go. Then they filed a lawsuit accusing us of false claims and not saying what they did.”
“The problem with Infogroup is they cannot compete in the marketplace,” he added. “They have no leadership, no brains and their product is obsolete. They have laid off 900 people in the company in Omaha alone. When I was there I created 1,800 new jobs in Omaha.”
Infogroup sold its research branch, Opinion Research Company International, to Chicago-based private equity firm Lake Capital Management in July. About 400 full-time employees, or approximately 15% of Infogroup’s full-time workforce, moved to Lake Capital Management as part of the transaction. Infogroup reportedly cut 140 jobs in June.
Gupta founded Infogroup in 1972, but was permanently barred by the Securities and Exchange Commission (SEC) in 2010 from acting as a director or officer of any public company after he settled a civil suit for allegedly misusing Infogroup company funds. He resigned from Infogroup’s board and sold his interest in the company shortly thereafter.
An Infogroup spokesperson declined to comment on the story.
