Perplexity, an AI search company, is facing serious legal challenges from major publishers. The startup became a defendant in a lawsuit filed on October 21 by Dow Jones and NYP Holdings. The lawsuit alleges that Perplexity unlawfully scraped content from The Wall Street Journal and The New York Post without permission.
According to the complaint, the plaintiffs had sent a letter to Perplexity in July raising concerns about these practices and suggesting a potential licensing agreement, but Perplexity “did not bother to respond.”
The lawsuit claims that Perplexity often provides answers to user queries that plagiarise full paragraphs or articles without providing the original source and that it misuses the trademarks of these publications by attributing information incorrectly, leading to what the lawsuit describes as “massive amount of illegal copying” that diverts customers and revenue.
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Also, The New York Times recently sent Perplexity a cease-and-desist letter regarding similar issues, accusing the AI company of scraping paywalled content and including it in responses without authorisation,” reports Digiday.
“Perplexity’s use of these marks in relation to hallucinations is likely to cause dilution by blurring and/or tarnishing Plaintiffs’ famous marks,” the lawsuit stated. “In addition, these false designations of origin confuse and deceive Perplexity users into believing that the hallucinations are associated with, sponsored by, or approved by Plaintiffs, when they are not. This, in turn, causes significant harm to Plaintiffs.”
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While some publishers are taking legal action against AI platforms, others are striking deals. For instance, News Corp signed a multi-year agreement with OpenAI worth $250 million.
Despite the legal hurdles, Perplexity is making strides to connect with advertisers. In July, the company launched an ad revenue-sharing program for publishers and is planning to roll out advertising on its platform soon.