AI search engine Perplexity is facing a new headache amid its fraught relationship with publishers: another copyright lawsuit. The suit is filed on behalf of two of Japan’s largest media groups, Nikkei and Asahi Shimbun, and accuses the company of copying and storing article content and ignoring a “technical measure” designed to prevent this from happening. The media groups are seeking damages of ¥2.2bn ($15mn) each.
The lawsuit is a setback to the AI search engine’s efforts to play nice with online publishers, especially media organizations, whose content it heavily relies on to produce its AI answers.
Perplexity’s AI-powered “answer machine” crawls websites to access content, then uses that material to generate concise answers for users that include citations. The answers summarize information from multiple sources, including news articles. Many news publishers however worry that the rise of AI search engines such as Perplexity could be an existential threat to the industry, diverting audiences away from their websites and undermining their advertising and subscription models.
To try and assuage some of these concerns, Perplexity has signed revenue-sharing partnerships with outlets including Fortune, Time, Le Monde, Der Spiegel, and the Los Angeles Times, and has promised to give partner organizations access to its enterprise tools to build their own AI products.
Perplexity also recently launched a program allowing publishers to share revenue generated from their content through its Comet web browser and AI assistant. The startup has allocated $42.5 million for the initiative, with publishers receiving 80% of revenue from a new subscription tier, Comet Plus. Publishers will earn money when their articles drive traffic through Comet, appear in search queries, or assist users via the AI assistant.
Allegations of ignoring no-crawling signs
Perplexity, which was founded in 2022, was last valued at $18 billion in a July funding round. The company regularly speaks of the importance of journalism for its product. Jessica Chan, the company’s head of publishing partnerships, previously told Fortune that the company needs a “thriving journalism and digital publishing ecosystem” and “continual production” of journalistic information to succeed.
“There is really no world in which Perplexity is successful but publishers are not,” she said.
However, these efforts haven’t managed to prevent a growing list of media companies from pursuing legal action against the AI startup.
Perplexity has faced legal threats from the BBC for scraping and verbatim use of content without consent, as well as Forbes and Wired for republishing proprietary content without citation. It’s also currently battling a copyright suit from News Corp’sDow Jones and The New York Post. Just last week, the company failed to convince a New York federal court to dismiss or transfer the News Corp lawsuit.
The News Corp case and the latest lawsuit brought by Nikkei and Asahi make similar claims but will be assessed under different copyright law.
In Japan, AI training on existing copyrighted works is partially permitted, but restrictions apply when content is copied or stored without consent or when publishers’ technical safeguards are ignored. In contrast, U.S. copyright law generally offers stronger protections for publishers, with courts scrutinizing reproduction and commercial use of content.
Nikkei and Asahi’s lawsuit also claims that Perplexity has damaged the papers’ credibility by providing incorrect summaries and information falsely attributed to the newspapers’ articles, violating the Unfair Competition Prevention Act, a Japanese law that prohibits various forms of unfair competition to ensure fair practices in the market and protect businesses from misconduct such as misleading advertising.
In a statement shared with the Financial Times, which is owned by Nikkei, the financial newspaper accused the company of “’free riding’ on article content that journalists from both companies have spent immense time and effort to research and write,” while paying no compensation.
The claim also includes allegations that, in copying and storing news articles, Perplexity ignored technical safeguards like the “robots.txt” code used by websites to signal whether their data can or cannot be scraped by automated crawlers; Perplexity says it respects these request, though a 2024 report in Wired found Perplexity may have violated its pledge by using undisclosed IP addresses to access content from sites that had opted out of being scraped.
The crawling issue has also caused friction between Cloudflare and Perplexity. The cybersecurity company has also alleged that Perplexity is bypassing websites’ no-crawling requests by disguising its identity, making it appear as though the traffic is coming from a different source. Cloudflare investigated the AI startup after customers reported that Perplexity was ignoring robots.txt directives.
Perplexity did not immediately respond to Fortune’s request for comment.