US appeals court tests limits of 1986 computer fraud law in Amazon-Perplexity AI dispute

Amazon.com, Inc.

Amazon.com, Inc.

AMZN

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By Blake Brittain

- A U.S. appeals court on Thursday considered the novel issue of whether Perplexity AI can be held responsible for its "agentic" AI system allegedly accessing Amazon AMZN.O user accounts without the e-commerce giant's permission.

Agentic AI systems can plan, reason and execute tasks with limited ​human oversight. A three-judge panel of the 9th U.S. Circuit Court of Appeals sitting in Seattle grappled with how to apply a 1986 computer fraud law to AI during oral arguments in Perplexity's appeal of a lower court's order that had blocked it from using its AI agents on Amazon's platform.

The case is one of the first to consider who could be liable for the actions of agentic AI, a fast-growing sector of the AI industry.

Amazon sued Perplexity in November, accusing the AI startup of ​covertly accessing private Amazon customer accounts through its Comet browser and ​associated AI agent, which can log into users' online shopping accounts and place orders on their behalf. The lawsuit said Perplexity's system posed security risks and that it had ignored repeated requests to stop.

Perplexity responded that the lawsuit lacked merit and was a "bald attempt" to block Amazon users from using Comet because ​AI agents "don’t have ​eyeballs to see ⁠the pervasive advertising Amazon bombards its users with."

A federal judge in California temporarily blocked Perplexity in March from using its agentic AI shopping tool on Amazon, finding Amazon had ​presented "strong evidence" that Perplexity's agent accessed its systems ​unlawfully under a U.S. computer fraud and abuse law.

The 9th Circuit judges questioned whether the AI agents or their users were the ones who "accessed" the site under the law, and whether the company had the unlawful "intent" to access Amazon accounts.

One way to frame what is happening, U.S. Circuit Judge Eric Tung said, could be that "the user is giving the key to Perplexity, and Perplexity is then entering Amazon's servers or computers. Much of this case turns on the proper analogy."

U.S. District Judge John Hinderaker of Arizona, sitting by designation on the panel, said that the case was difficult because the relevant law, enacted in 1986, was "not really built" to consider AI.

"Does an AI agent ever have intent?” Hinderaker asked.

The case is Amazon.com Services LLC v. Perplexity AI Inc., 9th U.S. Circuit Court of Appeals, No. 26-1444.

For Amazon: Hagan Scotten of Hueston Hennigan

For Perplexity: Chris Michel of Quinn Emanuel Urquhart & Sullivan

Read more:

Amazon sues Perplexity over 'agentic' shopping tool

Amazon ​wins order blocking access for Perplexity's AI shopping 'agent'