Perplexity AI faces lawsuit from Encyclopedia Britannica and Merriam-Webster

Encyclopedia Britannica and Merriam-Webster have filed a lawsuit against artificial intelligence startup Perplexity AI, accusing the company of copyright infringement, trademark violations, and siphoning away internet traffic. The case was lodged in federal court in New York on Tuesday.

In the legal complaint, Britannica, which owns Merriam-Webster, alleged that Perplexity’s “answer engine” systematically copies material from its websites without authorization. The legal tussle claims the AI tool plagiarizes Britannica’s and Merriam-Webster’s works and deprives them of visitors and revenue.

The filing goes further by accusing Perplexity of trademark infringement, asserting that the platform has attached Britannica and Merriam-Webster names to inaccurate or incomplete AI-generated results. Per the plaintiffs, this misleads users into thinking the companies endorse or are responsible for content they did not create.

“AI-created content confuses and deceives Perplexity users into believing (falsely) that the hallucinations are associated with, sponsored by, or approved by Britannica,” the filing read.

Britannica: Perplexity plagiarism diverts internet traffic

The plaintiffs shared some snapshots of Perplexity’s definition of the word plagiarism that appeared identical to Merriam-Webster’s entry. 

According to the complaint, Perplexity’s “answer engine” does not act as a neutral search engine but instead “free rides” on the investment of publishers. Traditional search engines such as Google direct users to third-party websites, allowing publishers to earn revenue from subscriptions and advertising. 

“Web publishers like Plaintiffs rely on those clicks to sell subscriptions to users who seek to delve more deeply into some content, as well as selling advertising to third parties who seek to present their products or services before the publishers’ users,” the lawsuit surmised.

But as the complaint puts it, Perplexity “hijacks” this traffic by summarizing copyrighted articles directly in its responses. The publishers insist this practice reduces their ability to sell subscriptions and advertising, cutting out the business models funding for their editorial and reference work.

Perplexity AI describes its product as an advanced search tool that uses real-time web crawling to gather and condense information. The company advertises its service as concise, conversational summaries based on “top-tier sources.”

“When you ask Perplexity a question, it uses advanced AI to search the internet in real time, gathering insights from top-tier sources,” the company explains on its website, according to the lawsuit. “It then distills this information into a clear, concise summary, delivering exactly what you need in an easy-to-understand, conversational tone.”

Britannica and Merriam-Webster argue that this marketing confirms their accusations, which is “cannibalizing traffic” to their platforms by reproducing material in summaries rather than directing users to the original sources.

The Britannica lawsuit is not the only legal turmoil the AI company is battling, as several other media groups have been in court to challenge its use of their content.

Heaps of legal charges have been sent towards Perplexity, including one from News Corp’s Dow Jones and the New York Post, filed in October 2024. The basis of the query is unauthorized use of published articles in the AI platform’s responses. 

News Corp, parent company of The Wall Street Journal and the New York Post, has accused it of building up its business at the expense of publishers’ rights. Other media outlets, including Forbes, The New York Times, and the BBC, have also clashed with Perplexity over misappropriation of articles.

Encyclopedia Britannica and Merriam-Webster are seeking damages for copyright and trademark infringement, along with an injunction to stop Perplexity from reproducing or attaching their names to AI-generated outputs. 

Perplexity’s backers and partnerships

Perplexity has acquired funding from high-profile backers, including Amazon founder Jeff Bezos. The company has also struck partnerships with some publishers willing to test revenue-sharing models.

As reported by Cryptopolitan in late August, the startup set aside $42.5 million in revenue to share with publishers when their content appears on its internet browser, Comet. 

Time magazine and the Los Angeles Times have joined Perplexity’s ad revenue program. While some organizations are quite happy holding hands with the AI institutions, others are worried about losing control over their intellectual property.

Last Monday, the World History Encyclopedia announced the launch of a Perplexity-powered chatbot. The bot uses the encyclopedia’s database of academic sources and articles through conversational AI.

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