Amazon Sends Legal Notice to AI Startup Perplexity AI Over Online Shopping Agent

Amazon.com Inc. has escalated its dispute with AI startup Perplexity AI Inc. by sending a cease-and-desist letter. The e-commerce giant demands that Perplexity's AI browser agent, known as Comet, cease making online purchases for users on Amazon. Amazon alleges that Perplexity is committing computer fraud by failing to disclose these automated purchases, violating Amazon's terms of service. Furthermore, Amazon claims Perplexity's agent degrades the shopping experience and introduces privacy vulnerabilities.

Perplexity AI, however, has publicly accused Amazon of bullying a smaller competitor. The startup asserts that users should have the freedom to choose their preferred AI agent for making purchases on Amazon. This conflict highlights a growing debate around the proliferation of AI agents that can handle complex online tasks. Amazon itself is developing its own AI shopping features, such as 'Buy For Me' and 'Rufus,' but startups like Perplexity are pushing the boundaries of AI browser functionality. Perplexity, valued at $20 billion, believes Amazon's stance is not customer-centric and aims to force users to use only Amazon's own assistants.

Amazon's conditions of use prohibit data mining and similar tools. While Perplexity had previously complied with a request to stop purchasing bots in November 2024, it later deployed its Comet agent, which logged into user Amazon accounts and disguised itself as a Chrome browser. Amazon's attempts to block these agents were met with updated versions from Perplexity.

Impact This dispute has significant implications for the future of AI agents in e-commerce and highlights potential conflicts between established platforms and emerging AI technologies. It could influence how AI interacts with online marketplaces and affect investor confidence in AI-driven commerce solutions. The potential threat to Amazon's lucrative advertising business, if bots bypass traditional search-query-based advertising, is also a key consideration. Rating: 8/10

Difficult Terms: Cease-and-desist letter: A formal written demand from one party to another to stop an illegal or allegedly illegal activity. AI browser agent: A software program that uses artificial intelligence to navigate and interact with websites on behalf of a user. Computer fraud: The use of computers or computer-related activities to defraud individuals or organizations. Terms of service: The rules and regulations that a user must agree to in order to use a particular website or service. Privacy vulnerabilities: Weaknesses in a system that could lead to the unauthorized disclosure of sensitive information. AI agents: Software programs designed to perform tasks autonomously or semi-autonomously, often with a degree of intelligence. Personalization: The process of tailoring products, services, or content to individual users' preferences and past behaviors. Trade show: An exhibition where businesses in a specific industry display and demonstrate their latest products and services. Digital infrastructure: The fundamental technological resources, such as hardware, software, and networks, that support digital operations.