Reddit Sues Perplexity, Others Over Alleged Data Scraping (3)

Reddit Inc. sued Perplexity AI Inc. and three other companies over alleged data scraping from the discussion site without permission, a sign of the growing demand and value of original data in the burgeoning AI industry.

Three data scraping companies — Oxylabs UAB, AWMProxy, and SerpApi — have been illegally collecting Reddit data via Google search results for the purpose of reselling it, according to the complaint filed Wednesday in federal court in Manhattan. Perplexity has been buying that data from at least one of the companies, the suit alleges.

Reddit is seeking monetary damages and a court order to stop the alleged scraping and use of its data in violation of federal copyright law. Shares of the San Francisco-based company closed down more than 4% in New York trading.

Reddit’s growing repository of data has become a valuable commodity given the rise in AI models that rely on massive troves of information for training and surfacing relevant results. Reddit has already inked deals with OpenAI and Alphabet Inc.’s Google to license its data for training purposes, but has taken legal action against others it believes to be using the data without a formal agreement.

Reddit sued AI firm Anthropic PBC earlier this year in San Francisco court over similar data scraping allegations.

“AI companies are locked in an arms race for quality human content — and that pressure has fueled an industrial-scale ‘data laundering’ economy,” Ben Lee, Reddit’s chief legal officer, said in a statement shared with Bloomberg News. “Reddit is a prime target because it’s one of the largest and most dynamic collections of human conversation ever created.”

Spokespeople for Perplexity, SerpApi and Oxylabs each said their companies hadn’t yet been served with the complaint.

Perplexity spokesperson Beejoli Shah said the firm “will always fight vigorously for users’ rights to freely and fairly access public knowledge.”

“Our approach remains principled and responsible as we provide factual answers with accurate AI, and we will not tolerate threats against openness and the public interest,” Shah said in an emailed statement.

Perplexity called the lawsuit a “show of force” in Reddit’s data negotiations with OpenAI and Google in a statement posted on Reddit.

SerpApi spokesperson Ryan Schafer said in a statement “we strongly disagree with Reddit’s allegations and intend to vigorously defend ourselves in court.”

Denas Grybauskas, Chief Governance and Strategy Officer at Oxylabs, said in a statement the company is “shocked and disappointed” by the lawsuit, “as Reddit has made no attempt to speak with us directly or communicate any potential concerns.”

“Oxylabs has always been and will continue to be a pioneer and an industry leader in public data collection, and it will not hesitate to defend itself against these allegations,” Grybauskas said. “Oxylabs’ position is that no company should claim ownership of public data that does not belong to them.”

A spokesperson for AWMProxy, a Russian company, couldn’t be located.

The case is Reddit Inc. v. SerpApi LLC, 25-cv-08736, US District Court, Southern District of New York (Manhattan).

(Updates with additional Perplexity comment in the tenth paragraph.)

--With assistance from Madlin Mekelburg.

To contact the reporters on this story:
Kurt Wagner in San Francisco at kwagner71@bloomberg.net;
Riley Griffin in Washington at rgriffin42@bloomberg.net

To contact the editors responsible for this story:
Sarah Frier at sfrier1@bloomberg.net

Peter Blumberg

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