Reddit vs Anthropic & Perplexity: When Ignoring a Cease-and-Desist Becomes Exhibit A
When Reddit decided to make serious money from its data, it took two paths at once:
- signing licensing deals with companies like Google and OpenAI, and
- suing AI companies that tried to take the same data for free.
Two cases define that strategy right now:
- Reddit v. Anthropic – state court, focused on breach of contract and scraping in violation of Reddit’s terms;
- Reddit v. Perplexity + scrapers – federal court, focused on “industrial-scale” scraping and a cease-and-desist letter Perplexity allegedly ignored. (Reuters)
If you run a SaaS platform, an AI product, or a business built on user-generated content, these cases are effectively a live case study in:
- how far you can push your Terms of Use as a weapon, and
- how much damage you do to yourself by shrugging off a serious demand letter.
The Two Lawsuits in One Picture
| ⚖️ Case | 🤖 Defendant | 🧩 Court & posture | 🔍 Core allegations | 🧨 What makes it interesting |
|---|---|---|---|---|
| Reddit v. Anthropic | Anthropic PBC (Claude) | California state court (San Francisco Superior) (Reuters) | Extensive automated scraping of Reddit content to train Claude, despite Reddit’s restrictions and protests, and without a license | Reddit leans heavily on breach of contract and business torts rather than copyright; positions Anthropic as a “free rider” while others pay |
| Reddit v. Perplexity (plus SerpApi, Oxylabs, AWMProxy) | Perplexity AI Inc. and scraping partners | U.S. District Court, S.D.N.Y. (New York Post) | “Industrial-scale” scraping via Google and proxy networks, allegedly bypassing technical and contractual protections, after a cease-and-desist | Reddit frames Perplexity as building a $20B company on “stolen” data and treats the ignored C&D as proof of willful misconduct |
Both cases orbit the same idea:
Reddit views its firehose of user content as licensable infrastructure, not a public utility, and it wants courts to ratify that view.
Reddit v Anthropic: Terms of Use as the Primary Weapon
Reddit’s case against Anthropic is deliberately not a classic “you infringed our copyrights” lawsuit.
Instead, the complaint emphasizes:
- Breach of contract / Terms of Use
- Unjust enrichment
- Trespass to chattels (bots hammering servers)
- Unfair competition and tortious interference (Vital Law)
The narrative looks roughly like this:
- Reddit’s terms and robots.txt draw clear lines on commercial scraping and reuse of content.
- Anthropic allegedly sent automated bots that hit Reddit’s servers over 100,000 times, long after Reddit publicly complained and Anthropic allegedly claimed the bots were blocked. (Reuters)
- Reddit has paying data customers (Google, OpenAI, others). Anthropic, in Reddit’s telling, wanted the same value without paying. (AP News)
So the core injury is framed as:
“You promised not to do this when you clicked through our terms. You did it anyway. And you used it to compete with us and our paying partners.”
That framing matters if you’re a platform or SaaS company, because it says:
- You don’t have to win the cosmic “is scraping fair use?” battle to still have a strong case.
- You can stay on home turf: contracts, server abuse, and unfair competition.
Reddit v Perplexity: The Case Built Around an Ignored Demand Letter
The Perplexity case adds a new ingredient: a cease-and-desist letter that allegedly backfired.
According to Reddit:
- In May 2024, Reddit told Perplexity to cease and desist from using Reddit data in its commercial offerings. (Reddit Inc)
- Instead of backing off, Perplexity allegedly ramped up its use of Reddit data, with citations to Reddit increasing forty-fold after the letter. (Reuters)
- Perplexity and its scraping partners (SerpApi, Oxylabs, AWMProxy) are accused of:
- disguising their bots,
- masking IPs and locations, and
- routing scraping through Google search results to bypass Reddit’s protections. (New York Post)
Reddit even set a “trap”:
- It created a test post only visible via Google, not Reddit’s own UI.
- That post later appeared in Perplexity’s results, which Reddit cites as proof the data was obtained via scraping schemes rather than normal user access. (Adweek)
From a litigator’s perspective, this is about as clean a story as you can ask for:
| 💼 Evidence element | 🧠 What Reddit is trying to show |
|---|---|
| Clear ToS + robots.txt | “We drew bright lines; this isn’t an accident.” |
| Cease-and-desist letter | “We put them on explicit notice and gave them a chance to stop.” |
| Post-letter activity spike | “They knew exactly what they were doing and did more of it anyway.” |
| Honey-pot test post | “We can prove access came through the scraping scheme they deny.” |
That’s why the ignored C&D is so important. It transforms the case from “maybe they misunderstood the rules” into “they knew we objected and doubled down.”
Perplexity, for its part, publicly insists that it is an “application-layer company,” that it does not train models on Reddit content, and that it lawfully accesses data through search engines and available APIs. It portrays Reddit’s position as an attempt to extract payments for lawful access. (Reddit)
But whether that narrative is persuasive in court, the evidentiary posture created by the C&D plus post-letter spike is exactly what you do not want as a defendant.
Why These Cases Matter Beyond Reddit
These suits are not just Reddit drama. They are early attempts to set the rules of the game for:
- Platforms built on user content that want to sell access to AI companies, and
- AI / SaaS companies that need training data but don’t want to sign every license that’s waved at them.
At a deeper level, they are about who gets to decide:
- whether public web content is effectively “fair game” for training, or
- whether platform terms and paywalled APIs become the gatekeepers.
If Reddit wins big on a contract / anti-circumvention / unfair competition theory, that gives other platforms a playbook:
- tighten your ToS,
- invest in anti-scraping tech,
- send serious C&Ds,
- and sue the companies that ignore them, even without leaning hard on copyright. (FindLaw)
If Reddit loses, or wins only in narrow ways, AI companies will have more comfort treating public web pages as effectively an open training set, at least until legislatures step in.
The Cease-and-Desist Letter as a Strategic Asset
For lawyers and in-house counsel, the Perplexity case is a reminder that a well-constructed demand letter is not just about “asking nicely.”
It’s part of the evidence pipeline.
What the Reddit C&D appears to have done
Based on the complaint excerpts and commentary:
- It made Reddit’s position crystal clear: Perplexity’s use of Reddit data for commercial AI products was not authorized. (Reddit Inc)
- It drew a line in time. Everything that happened afterward can be characterized as knowing and willful.
- It set the stage for damages arguments: “they built a multi-billion-dollar business on data we explicitly told them not to use.” (Business Insider)
In other words, the C&D letter:
- clarified the contract dispute,
- framed the equities, and
- upgraded any subsequent scraping from “arguably mistaken” to “deliberate.”
For a plaintiff, that’s gold.
Lessons for Platforms and SaaS Companies
If you run any business where users post, upload, or generate content, Reddit’s strategy offers a practical blueprint.
Strengthen your paper shield
Your Terms of Use and technical policies should be written as if they will one day be read aloud to a judge in a scraping case.
At a minimum, they should:
- define permitted vs prohibited automated access,
- explicitly restrict commercial reuse and training of AI models without a license, and
- reserve rights to pursue both contract and technical-protection claims (including anti-circumvention theories where appropriate). (Vital Law)
Reddit’s complaints spend a lot of time explaining that they are not anti-AI per se—they already license data to some AI firms—but that scraping without paying is a business and trust problem. That narrative is anchored in the text of their ToS.
Treat serious demand letters as part of your enforcement program
If you discover a scraper or AI company abusing your content:
- Document what’s happening (server logs, test posts, reproduced content).
- Send a targeted, specific demand letter that:
- cites your ToS and any prior public statements;
- describes the conduct and how you know it’s happening;
- demands cessation and, if appropriate, deletion of derived material;
- reserves all rights explicitly.
- Track what happens next. If the activity continues or spikes, that timeline is part of your case.
From an evidentiary perspective, you want the demand letter to become:
| 🎯 Goal | 📜 How the demand letter helps later |
|---|---|
| Show notice | “They cannot say they didn’t know our position.” |
| Show willfulness | “They did more of the same after the letter.” |
| Show reasonableness | “We tried to resolve this without litigation.” |
That is exactly how Reddit is using its 2024 letter to Perplexity.
Lessons for AI and Data-Hungry SaaS Companies
If you’re on the other side—building an AI product or a data-dependent SaaS tool—these cases are a loud warning siren.
Know when you’re betting the company on a ToS interpretation
It’s one thing to argue, as Perplexity does, that you’re just an “application layer” tool reading publicly available content via search engines. (Reddit)
It’s another thing to:
- continue large-scale ingestion after receiving a detailed C&D,
- use scrapers or proxy networks that look, in a complaint, very much like evasion, and
- build a valuation narrative around access to content you haven’t paid for. (Business Insider)
You might be right on the law in the end. But if you’re wrong, you’re not just paying statutory damages—you’re defending the entire business model in a hostile forum with a bad evidentiary record.
Treat a serious C&D as a board-level event
For AI and SaaS leadership, a detailed cease-and-desist from a major platform is not “just another letter.” It is:
- a potential material legal risk,
- an investor-relations problem, and
- something regulators will be happy to read.
Smart teams:
- escalate these letters to counsel and leadership immediately,
- evaluate whether their legal theory is strong enough to justify continued conduct, and
- if necessary, pivot to licensing or alternative data sources instead of simply hoping the platform will not sue.
Ignoring the letter is what turns it into a future plaintiff’s favorite trial exhibit.
Demand Letters as Part of the AI Data Stack
Zooming out, Reddit’s dual strategy—license with some AI firms, sue others—is a glimpse of where the ecosystem is going:
- Platforms will harden their technical defenses and contract language.
- They’ll use demand letters as the first escalation step to draw lines and create notice.
- Litigation will focus less on esoteric fair-use arguments and more on breach of contract, circumvention, unjust enrichment, and abuse of shared infrastructure. (Vital Law)
For lawyers who write demand letters and draft tech contracts, this is fertile ground. Every one of these disputes begins life as:
- a ToS someone clicked years ago, and
- a letter someone chose either to take seriously or to ignore.
Reddit v. Anthropic and Reddit v. Perplexity are simply the first high-profile examples of what happens when you build an AI company on that foundation.