By Dawn Chmielewski and Katie Paul
(Reuters) -Media baron Rupert Murdoch's Dow Jones and New York Post filed a lawsuit against Perplexity AI on Monday, claiming the artificial intelligence startup engages in a "massive amount of illegal copying" of their copyrighted work.
The lawsuit is the latest salvo in a bitter ongoing battle between publishers and tech companies over how the latter may use copyrighted content without authorization to build and operate their AI systems.
"This suit is brought by news publishers who seek redress for Perplexity's brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce," according to the lawsuit filed in the Southern District of New York by Wall Street Journal parent Dow Jones and the NY Post.
Perplexity did not immediately respond to emails from Reuters seeking comment.
The AI company is among the leading startups attempting to uproot the search engine market dominated by Alphabet’s (NASDAQ:GOOGL) Google. It assembles information from webpages it deems to be authoritative, then provides a summary directly within Perplexity’s own tool.
Perplexity uses a variety of large language models (LLMs) to generate its summaries, from OpenAI to Meta (NASDAQ:META)'s open-source model Llama. It provides citations in those results, though Perplexity's own marketing promotes the notion that its interface enables users to “skip the links.”
Google likewise now shows AI-generated summaries similar to those offered by Perplexity, though most publishers grudgingly accept that arrangement because opting out would also mean having their content removed from Google's search results, which would render them virtually invisible online.
The news publishers seek to differentiate Perplexity from search engines, which they argue allow for the discovery of their work, not a substitution for it, according to the lawsuit.
In the suit, the News Corp-owned publishers say their journalists investigate and write stories under tight deadlines and unpredictable circumstances. There is high demand for high-quality news presented in a timely, digestible format, and these publications rely on the sale of advertising and subscriptions to underwrite the cost of journalism, they argue.
The news organizations allege Perplexity’s AI-generated “answer machine” has ingested its copyrighted news stories, analysis and opinion in an internal database used to generate responses to users’ questions.
In its quest to provide answers, Perplexity copied "vast" quantities of the publishers' work into a database, which uses an AI technique known as retrieval-augmented generation (RAG) to provide answers to users' queries, the suit alleges.
Perplexity formulates its responses in a way that, at times, reproduces the content verbatim, the news organizations claim. The suit alleges these actions constitute an unlawful copyright infringement.
"Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers and News Corp (NASDAQ:NWSA)," News Corp CEO Robert Thomson said in a statement.
In July, Dow Jones and the New York Post sent a letter to Perplexity notifying it of the legal issues raised by its unauthorized use of copyrighted works, and offering to discuss a potential licensing deal. The company did not respond, according to the suit.
The news organizations are asking the court to stop Perplexity from using its news articles as the basis for providing answers to questions, and to order the destruction of any database using its copyrighted work.
With its lawsuit, News Corp is joining the ranks of multiple publishers that have sued AI companies for copyright infringement over their use of content without authorization, both to train algorithms and to generate summaries of real-time information.
Earlier this month, New York Times sent Perplexity a "cease and desist" notice demanding it to stop using the newspaper's content for generative AI purposes.
Perplexity has also faced accusations from media organizations such as Forbes and Wired for plagiarizing their content, but has since launched a revenue-sharing program to address some concerns put forward by publishers. Some publishers are signing licensing agreements with AI companies open to paying for content, although the sides often disagree over the value of the materials. Many AI developers argue they have broken no laws in accessing them for free.
In May, News Corp announced it had struck a multi-year partnership with OpenAI, with Thomson applauding the tech company for understanding "that integrity and creativity are essential" to realize the potential of artificial intelligence.
While Perplexity has drawn the most scrutiny for its practices, it is not alone among AI companies in circumventing a common web standard used by publishers to block the scraping of their content, content licensing startup TollBit told publishers over the summer.