The New York Times filed a lawsuit against Perplexity in federal court on Friday.
The complaint alleges that the San Francisco-based startup of building its business on massive copyright infringement. According to the filing, Perplexity's "answer engine" illegally scrapes millions of articles to generate detailed summaries that serve as direct substitutes for the original reporting.
"Skip the links" at the publisher's expense
The lawsuit argues that Perplexity's business model depends on free-riding on the Times's investment in journalism. By using Retrieval-Augmented Generation (RAG), the system retrieves protected content to answer user queries. The Times claims this practice, marketed with the promise to "skip the links", effectively removes the need for users to visit the publisher's website, depriving it of essential ad and subscription revenue.
To prove its point, the complaint cites specific examples where Perplexity summarized Wirecutter product reviews so thoroughly that a user would have no reason to click through to the source.
The dispute highlights the technical cat-and-mouse game between publishers and AI firms. The Times says it attempted to block Perplexity's automated "crawlers" using standard robots.txt protocols in early 2024. When that failed, the publisher implemented a "hard block" on the startup's bots. Despite these measures, the lawsuit claims Perplexity continued to access the site using "stealth" tactics and undisclosed user agents to bypass security.
Hallucinations damage the brand
Beyond copyright issues, the Times accuses Perplexity of trademark dilution through "hallucinations." The complaint cites instances where the AI fabricated information and falsely attributed them to the newspaper. In one example involving the review site Wirecutter, the AI allegedly recommended a baby product that had actually been recalled for safety reasons, falsely claiming Wirecutter had endorsed it.
This filing adds to the mounting legal pressure on the $20 billion startup. Dow Jones, the parent company of The Wall Street Journal, sued Perplexity on similar grounds in August 2024. The Times is also currently litigating against OpenAI and Microsoft in a separate high-profile case filed in late 2023. Overall, rights holders have now brought more than 60 cases against AI companies across the United States.
