Amazon.com, Inc. (AMZN.US) sues Perplexity in dispute over AI agent rights, will the 20 billion valuation startup face "platform ban"

Amazon.com, Inc. is suing the artificial intelligence startup Perplexity AI Inc., attempting to stop the company from helping users shop on the world's largest online trading platform. This confrontation could have far-reaching implications for the application scope of "agentic artificial intelligence". On Tuesday, the online retailer filed a lawsuit, demanding that Perplexity cease allowing its AI browser agent, Comet, to perform online shopping operations for users. According to the complaint filed in the U.S. District Court for the Northern District of California, Amazon.com, Inc. accuses Perplexity of computer fraud - Comet impersonates real people shopping without disclosing its identity as required, violating Amazon.com, Inc.'s terms of service. According to sources, Amazon.com, Inc. had previously sent a cease and desist letter to Perplexity on Friday, accusing the startup of disrupting Amazon.com, Inc.'s shopping experience and creating privacy and security vulnerabilities. This lawsuit is a further escalation of the dispute between the two parties. The lawsuit could set a precedent for the boundaries of the application of "agentic artificial intelligence", clarifying its authority in assisting humans in planning and completing real-world tasks automatically (rather than just generating online content). A spokesperson for Perplexity stated that this lawsuit "demonstrates Amazon.com, Inc.'s abuse of power". The company had previously claimed in a blog post that Amazon.com, Inc. was targeting them because Perplexity had launched a product competing with Amazon.com, Inc.'s AI shopping agents; and asserted that users should have the right to choose their preferred agent to shop on the Amazon.com, Inc. platform. The blog post stated: "This is a form of bullying intended to intimidate innovative companies like Perplexity from improving the lives of users." The conflict between Amazon.com, Inc. and Perplexity provides a glimpse into an upcoming debate: how to deal with the proliferation of "AI agents". These agents can perform more complex tasks for users online, including shopping. Similar to OpenAI and Alphabet Inc. (GOOGL.US), Perplexity has been pushing to restructure traditional web browsers based on AI, aiming to simplify more operations for users such as drafting emails and conducting research. In the lawsuit documents, Amazon.com, Inc. stated: "Our request is clear: Perplexity must maintain transparency when deploying artificial intelligence. Like any other unauthorized intruder, Perplexity has no right to enter areas explicitly prohibited; even if it is using code rather than lock-picking tools, this illegal intrusion is not legitimate in any way." It is worth noting that Amazon.com, Inc. itself is developing AI agents, some of which have shopping functionalities. In April of this year, the company launched a feature called "Buy For Me" (proxy purchasing) (currently in beta testing), allowing users to make purchases on brand websites through the Amazon.com, Inc. shopping app. Another AI assistant, "Rufus", can browse the Amazon.com, Inc. website, recommend products to shoppers, and add items to the shopping cart. However, most experiments on "how agents interact with the web" have been driven by startups like Perplexity. Currently, Perplexity's valuation has reached $20 billion. Perplexity's CEO Aravind Srinivas stated in an interview: "In fact, we have drawn a lot of inspiration from Amazon.com, Inc. But I believe that forcing users to only use their in-house assistants (which may not even be the best shopping assistant) is not customer-centric." The terms of use for Amazon.com, Inc.'s retail website explicitly prohibit the use of "any data mining, Siasun Robot & Automation, or similar data collection and extraction tools." Sources revealed that in November 2024, Amazon.com, Inc. had requested Perplexity to temporarily suspend the deployment of AI agents that could purchase items on its platform until an agreement was reached between the two parties, to which Perplexity complied. However, Amazon.com, Inc. pointed out in the cease and desist letter that in August of this year, Perplexity began using its new Comet browser agent, which could log into users' Amazon.com, Inc. accounts; and this time, Perplexity disguised its agent as an Alphabet Inc. Class C Chrome browser user. After Perplexity refused to stop using the Siasun Robot & Automation, Amazon.com, Inc. attempted to block them, but Perplexity then released a new version of Comet, bypassing Amazon.com, Inc.'s security measures. Amazon.com, Inc. spokesperson Lara Hendrickson stated in an email statement: "Third-party applications that shop on behalf of clients on other corporate platforms should operate openly and respect the decision of the service provider whether to allow their participation, this is an obvious principle." She added that companies in other industries such as food delivery services and online travel agencies follow this principle. She further stated: "Third-party proxy applications like Perplexity's Comet must also fulfill the same obligations. We have repeatedly requested Perplexity to remove Amazon.com, Inc. from the service range of Comet, especially considering the application significantly disrupts the shopping experience and customer service quality." In response to Amazon.com, Inc.'s accusation in the cease and desist letter that "Perplexity is impersonating agent identities", Srinivas responded that he believes there is no need to distinguish between the "user themselves" and the "agent authorized to operate on their behalf". He argued that agents should have "the same rights and responsibilities as real human users", and stated that "it is not Amazon.com, Inc.'s responsibility to oversee such behavior". In the past 18 months, Perplexity has been embroiled in controversy several times: multiple publishers have accused them of using their content in AI news summaries without permission; and there are accusations that they purchased data illegally scraped from Reddit (RDDT.US) forums. In response, Perplexity had previously stated, "We will always steadfastly defend the right of users to freely and fairly access public knowledge." Srinivas stated that Perplexity's Comet browser agent does not engage in data scraping on the Amazon.com, Inc. platform or use it for AI training, only performing necessary actions for shopping based on user instructions. Perplexity also accused Amazon.com, Inc. in their blog post response to the cease and desist letter of attempting to "deprive users of their rights" in order to promote more advertisements. In the long term, shopping agents could pose a significant threat to Amazon.com, Inc.'s lucrative advertising business. Amazon.com, Inc.'s advertising revenue mainly comes from selling "search result priority display positions" to merchants - when shoppers search for products, the products of paying merchants appear first. If in the future users shop through Siasun Robot &Automation agents, the value of these advertising display positions may greatly decrease. Amazon.com, Inc. CEO Andy Jassy stated during last week's earnings call that the user experience brought by AI shopping agents "is not ideal" at the moment, pointing out issues such as "lack of personalized service, inability to integrate with users' exclusive shopping histories, inaccurate delivery time estimates, incorrect price displays", among others. However, he also mentioned: "But I believe we will eventually find a way to cooperate." He added that Amazon.com, Inc. is in communication with developers of third-party agents. It is worth noting that Perplexity is a customer of Amazon.com, Inc.'s cloud service (AWS). Srinivas stated that his company has committed "billions of dollars" in cooperation investment to AWS. In the 2023 AWS annual conference, Srinivas was also invited to the stage; AWS has repeatedly listed Perplexity as a case study of an AI company that is developing business based on Amazon.com, Inc.'s digital infrastructure. Additionally, Amazon.com, Inc.'s founder Jeff Bezos has also invested in Perplexity. The case number for this lawsuit is 3:25-cv-09514, with the case name "Amazon.com Services LLC vs. Perplexity AI Inc.", to be tried by the U.S. District Court for the Northern District of California (San Francisco).