News Corp subsidiaries Dow Jones and NYP Holdings have filed a copyright and trademark infringement lawsuit against artificial intelligence-powered search engine Perplexity, demanding their content is removed from the index underpinning the technology as well as mammoth damages.
The damages sought include “three times actual damages, actual damages, and Perplexity’s profits” for each instance of trademark dilution by the AI company, as well as $150,000 both for every piece of Dow Jones and NYP Holdings content copied by Perplexity and for every time the publishers’ content has been reproduced by the search engine.
Dow Jones publishes business-focused titles including The Wall Street Journal and Barron’s and NYP Holdings publishes the tabloid New York Post.
In the lawsuit, filed in the Southern District of New York on Monday, the News Corp subsidiaries demanded a jury trial over what they called “massive freeriding on Plaintiffs’ protected content”.
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In common with other publishers who have sued AI companies, the suit accuses Perplexity of profiting from content expensively created by News Corp journalists without first obtaining permission or providing any compensation. In addition to this copyright infringement, the Rupert Murdoch-owned company argues, Perplexity risks “hallucinating” and introducing false information into answers it attributes to News Corp titles, which it says could harm its trademarks.
News Corp says Perplexity’s ‘core business model involves massive freeriding’
Unlike a traditional search engine like Google or Bing, which presents users with a list of links in response to a query, Perplexity answers queries in natural language, using “retrieval augmented generation” (RAG) indexing of trusted sources to provide more accurate answers. News Corp regards the unauthorised inclusion of its content in these indexes as infringement of its copyright.
Although Google traffic has become increasingly unreliable as a revenue source, older search engines provided income to publishers because users usually had to click onto their websites for answers, which typically delivered some money from advertisers.
But generative AI-powered search engines answer user queries on their own platforms, which publishers fear will deprive them of web traffic and therefore ad revenue.
The News Corp subsidiaries made this argument in their suit, alleging that “Perplexity loudly touts that its answers to user queries are so reliable that its users can ‘Skip the Links’ to the original publishers and instead rely wholly on Perplexity for their news and analysis needs.
“What Perplexity does not tout is that its core business model involves engaging in massive freeriding on Plaintiffs’ protected content to compete against Plaintiffs for the engagement of the same news consuming audience, and in turn to deprive Plaintiffs of critical revenue sources.”
Perplexity does typically provide some small citations beneath its answers to let users know where the information has come from. However, the suit dismisses this line, arguing: “Dow Jones and NYP Holdings editors and journalists are not graduate students working out of a library or lab, eager to have someone acknowledge and utilise their research.
“They are professional journalists and publishers – working under high-pressure deadlines, sometimes in dangerous places – whose livelihoods depend on the enforcement and monetisation of their intellectual property rights.”
News Corp CEO Robert Thomson: ‘We must challenge the content kleptocracy’
The New York Times sent Perplexity a cease and desist letter last week, citing the same issues.
Perplexity has struck deals with a small number of publishers that involve the media outlets being compensated with a share of the ad revenue when their content is used to answer a user query. The company continues to serve up results from publishers with whom it does not have deals, however.
And News Corp itself has made a deal with rival AI business OpenAI, which The Wall Street Journal valued at $250m over five years.
“Perplexity has opted to ignore copyright law in an attempt to quickly get its products to market and to acquire a sizable customer base ahead of other AI companies”
In a statement, News Corp chief executive Robert Thomson said: “Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers and News Corp.
“The perplexing Perplexity has willfully copied copious amounts of copyrighted material without compensation, and shamelessly presents repurposed material as a direct substitute for the original source. Perplexity proudly states that users can ‘skip the links’ – apparently, Perplexity wants to skip the check.
“We applaud principled companies like OpenAI, which understands that integrity and creativity are essential if we are to realise the potential of Artificial Intelligence.
“Perplexity is not the only AI company abusing intellectual property and it is not the only AI company that we will pursue with vigour and rigour. We have made clear that we would rather woo than sue, but, for the sake of our journalists, our writers and our company, we must challenge the content kleptocracy.”
See Press Gazette’s full run down of which publishers are suing artificial intelligence companies and which ones are signing deals with them.
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