AI | Oct 23, 2024
Image: Freepik AI
Perplexity AI Lawsuit Adds Fuel to Broader Discussion on AI, Copyright, and Regulation
News Corp has filed a lawsuit against Perplexity AI for hijacking its content without proper permission (see legal document). Reports say the core issue is that Perplexity blends AI generated content with real news articles (called ‘hallucination’), which creates content that seems genuine but is fabricated. News Corp is suing for $150,000 in damages for each violation, arguing that this practice infringes on copyright laws and also undermines the value of its journalism, misleading readers and making it harder to determine when a content piece is real or fake. This lawsuit is part of a broader movement where AI companies must strike licensing arrangements with content publishers or risk being being offside and taken to court.
Licensing Agreements and Revenue Sharing
Although Perplexity AI has a revenue-sharing model with some publishers, it didn’t with News Corp at the time of the lawsuit. Some AI companies have made formal agreements with media outlets to use their content, such as:
- In July 2023 OpenAI struck a deal with Associated Press (AP) where OpenAI could use AP news articles to train its AI models where AP received compensation.
- In April 2024 OpenAI made a similar deal with the Financial Times. This partnership allows OpenAI to create summaries of FT articles and provides credit and links back to the original articles on FT’s website.
- In May 2024 OpenAI partnered with Vox Media and The Atlantic allowing OpenAI to use their content to improve AI responses with proper citations (back to the original sources).
- In July 2024 Perplexity launched a revenue-sharing program with 6 smaller publishers in the first batch, such as the Texas Tribute and automattic (parent of wordpress.com). This provides publishers an advertising revenue share when their content is used in in generated AI outputs. However perplexities revenue-sharing model is different than the structured agreements that other AI companies like OpenAI are making.
So there are a variety of approaches that AI companies are taking to address content licensing and usage. Each strategy of course has varied legal and financial implications, as seen with the current lawsuit against Perplexity.
Canada’s Regulatory Approach to AI and Copyright
As industry evolves, countries like Canada are working on new rules to address the challenges that come with AI technology. In October 2023, the Canadian government launched a public consultation to gain inputs on how AI systems should use copyrighted materials for their training, who owns these AI generated works, who is responsible with AI content infringes existing copyright laws etc.
See: AI Search Wars: SearchGPT vs Google Battle for Supremacy
This consultation builds on earlier efforts like the proposed Artificial Intelligence and Data Act (AIDA) under Bill C-27, aiming to ensure AI development in Canada respects the rights of content creators, and could lead to updates in the Copyright Act.
In the United States, the U.S. Copyright Office has gathered feedback from over 10,000 stakeholders. In Canada, according to Faskens, 98 submissions were collected, with many groups calling for changes to the Copyright Act to better balance the needs of creative industries and AI developers.
Future Policy Implications and Outlook
If the courts side with publishers like News Corp it might push AI companies toward making more formal agreements, similar to what OpenAI has done. This could lead to clearer rules where content creators are fairly paid when their work is used by AI systems, potentially setting new industry standards.
See: The Necessity of Copyrighting Your Voice in 2024
On the other hand, if AI companies win the case they might have more freedom in how they use publicly available content. But this would most certainly complicate the relationship and economics between media vs AI firms. The outcome is critical since AI is completely changing the way we create, share, and consumer information on a daily basis.
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