What happened

Dow Jones and the New York Post, both owned by Rupert Murdoch's News Corp, filed a lawsuit against Perplexity AI in the Southern District of New York alleging that Perplexity engaged in "massive illegal copying" of copyrighted content from their publications to fuel its AI-driven platform. 

The companies claim that Perplexity's practices allow users to bypass original sources, thereby diverting traffic and revenue away from the publishers, and that the system uses a technique known as retrieval-augmented generation (RAG) to generate responses that often reproduce their content verbatim, thereby undermining their business model and intellectual property rights.

The suit also says Perplexity harms the publications and their reputations “by falsely attributing to Plaintiffs certain content that Plaintiffs never wrote or published” by generating "hallucinatory" content.

Why it happened

The lawsuit stems from concerns over how Perplexity uses copyrighted materials without permission. Dow Jones and the New York Post argue that Perplexity's model relies heavily on their journalism, effectively competing for the same audience while depriving them of essential revenue streams from advertising and subscriptions. 

The publishers had earlier reached out to Perplexity with a potential licensing proposal but received no response. The legal action follows similar complaints from other media outlets, including the New York Times, which recently issued a cease-and-desist notice to Perplexity for unauthorised use of its content.