What happened

The Chicago Tribune filed a lawsuit in federal court against Perplexity AI, alleging "brazen" and "systemic" copyright infringement and trademark violations. 

Specifically, the Tribune alleged that Perplexity’s "answer engine" and its Comet browser use Retrieval-Augmented Generation (RAG) to bypass paywalls and scrape millions of copyrighted articles. 

Rather than directing users to the original source, the AI generates "substantially similar" or verbatim summaries that satisfy user queries on Perplexity's own platform. 

The suit claims this "free-riding" results in direct harm by:

• Starving revenue: Diverting web traffic and advertising dollars away from newsrooms.

• Trademark dilution: Attributing "hallucinations" (AI-generated falsehoods) to the Tribune, thereby damaging its reputation for accuracy.

• Unlicensed distribution: Reproducing investigative reporting and exclusive content without permission or compensation.

The filing joined a wave of litigation from other major publishers, including The New York Times, The Wall Street Journal, and The New York Post.

Why it happened

The conflict stems from a fundamental lack of transparency and sense of entitlement and unaccountability by Perplexity, combined with its aggressive "move fast" culture characteristic of many technology start-ups.

• Transparency limitations: Perplexity has been accused of using "shady tactics" to mask its web-crawling activities, allegedly ignoring robots.txt files (the industry standard for opting out of scraping) and bypassing digital gatekeepers like Cloudflare.

• Accountability gaps: While Perplexity claims it merely "indexes" the web for factual citations, publishers argue the RAG pipeline is designed to hide the extent of its copying.

• Corporate Strategy: The lawsuit highlights a shift in corporate accountability where AI firms prioritise rapid scaling and valuation over establishing fair-use licensing agreements, which competitors like OpenAI have begun to pursue with some media outlets.