Perplexity lawsuit puts AI privacy claims under pressure

Perplexity AI faces a proposed class action lawsuit in federal court in San Francisco, alleging it surreptitiously shared users’ personal data with Meta and Google in breach of California privacy laws.

The complaint says trackers sent users’ conversations, including in “Incognito” mode, to Meta and Google.

The lawsuit was brought by a Utah man listed as John Doe, who also names Meta and Google for alleged computer privacy and fraud violations.

Meta cited its rules against sensitive data sharing, while Perplexity said it has not been served the lawsuit.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

The lawsuit is part of a California legal gold rush

The complaint relies on the California Invasion of Privacy Act (CIPA), a California law that has driven a wave of class actions over common website trackers 1.
Plaintiffs often favor CIPA because it allows statutory damages of $5,000 per violation without proof of actual harm 1.
A federal ruling in Camplisson v. Adidas Am., Inc. said tools such as the TikTok Pixel and Microsoft Bing trackers could plausibly violate CIPA at the pleading stage, so the suit moved past a motion to dismiss 1.
The court also rejected, at the motion-to-dismiss stage, Adidas’s claim that visitors consented through terms and conditions and a privacy policy. It said footer disclosures may fall short without clear notice and affirmative consent before trackers load 1.

This case tests how AI apps handle user data and litigation risk

If the allegations hold, the dispute raises risk for AI chatbot providers and other consumer app makers that use third-party trackers. Private chats could reach ad-tech or analytics firms even when people use a browser’s “Incognito” setting.
The claims also raise questions about gaps between internal privacy policies and third-party platform rules, including Meta’s restrictions on sharing sensitive data. Those gaps can still lead to legal exposure even when a platform bans the sharing.
Across the industry, similar suits may push more interest in paid, privacy-focused subscriptions as product teams and legal teams weigh “free” use backed by tracking against regulatory and class-action risk.