News Corp. is taking Perplexity AI to court, claiming the AI company generates misleading “hallucinations” falsely attributed to The Wall Street Journal and the New York Post.
In a lawsuit filed in October 2024, Dow Jones & Company, Inc. and NYP Holdings, Inc., subsidiaries of News Corp., allege that AI company Perplexity AI, Inc. has engaged in trademark violations and copyright infringement. The lawsuit alleges that Perplexity damages the publishers’ reputations, revenue, and licensing opportunities in the fast-evolving AI landscape, including by fabricating quotes and scraping content without permission.
According to the complaint, Perplexity’s AI-driven “answer engine” generates false or misleading information—referred to as “hallucinations”—that it allegedly attributes to The Wall Street Journal and the New York Post, subsequently misleading users into believing this content is authentic news from those publications. The plaintiffs allege that, in doing so, Perplexity's false attributions dilute their trademarks and damage their reputations for accuracy, as the AI sometimes cites their publications while generating incorrect or fabricated information.
The complaint also claims that Perplexity’s AI scrapes content from original news outlets to fuel its internal “retrieval-augmented generation” (RAG) index, which is used to provide responses to user queries. The plaintiffs argue that these responses often summarize or reproduce portions of copyrighted articles without authorization, allowing users to bypass the original publishers’ websites, which negatively impacts their advertising and subscription revenues.
Finally, the lawsuit also contends that Perplexity’s use of plaintiffs' content without permission undermines legitimate licensing deals with other AI companies.
According to the complaint, News Corp. sent a letter in July 2024 to Perplexity to propose a licensing deal, but Perplexity never responded, leading to this legal action. The plaintiffs are seeking damages, an injunction to stop the unauthorized use of their content, and the removal of copyrighted material from Perplexity’s systems.
The case—a string in a series of similar cases from plaintiffs such as the New York Times—highlights the legal challenges AI companies may face when using third-party content.
You can read more about the lawsuit here and can read the actual complaint here.
