Perplexity AI Faces Class-Action Lawsuit Over Alleged User Data Sharing With Meta and Google

Perplexity AI, one of the highest-profile AI-native search companies of the past two years, is facing a class-action lawsuit filed in federal court in San Francisco. The complaint alleges that the company installs tracking software on users' devices when they log in to Perplexity's homepage — and that this software shares personal chat conversation data with Meta and Google, including conversations conducted under the platform's "Incognito" mode.

The lawsuit was filed on behalf of a Utah resident who claims he used Perplexity to discuss financial and tax information, with the expectation that the "Incognito" privacy setting would prevent data sharing with third parties. If the class is certified, the plaintiff is likely to be joined by potentially millions of Perplexity users who may have shared sensitive information under similar assumptions.

The Core Allegation: Trackers That Bypass Privacy Modes

The complaint's most serious claim is that Perplexity's tracking software operates through the platform's own privacy controls — that activating Incognito mode does not prevent the trackers from sharing conversation content with Meta and Google's advertising and analytics infrastructure. If substantiated, this would represent a material misrepresentation to users about what their privacy settings actually protect.

The mechanism alleged is common in the broader ad-tech ecosystem: third-party trackers embedded in web applications routinely send behavioral data to advertising networks regardless of application-level privacy settings. What distinguishes this alleged case is the sensitivity of the data in transit — not browsing behavior, but the content of AI conversations that users treat as confidential queries to a search assistant.

Responses From the Parties Named

Meta, named in the complaint as a recipient of shared data, referenced its advertising policies, which "prohibit advertisers from submitting sensitive data." The statement positions the alleged data sharing as a policy violation by Perplexity rather than accepted practice, but does not address whether Meta's systems received or processed the data before any policy enforcement could occur. Google has not commented.

Perplexity spokesperson Jesse Dwyer stated the company "has not been served with any such lawsuit" — a procedural denial that does not address the substance of the allegations. The company has not issued a substantive public statement about its data sharing practices or the specific tracking software described in the complaint.

Why This Case Matters Beyond Perplexity

The Perplexity lawsuit reflects a broader unresolved tension in the AI search market. Platforms that aggregate conversational AI queries are collecting a qualitatively different kind of data than traditional search engines — users share financial questions, health concerns, legal situations, and personal circumstances in natural language with AI assistants in ways they never would with a keyword search box. The expectation of confidentiality is higher. The regulatory and contractual frameworks for protecting that data remain underdeveloped.

AI search companies including Perplexity, You.com, and others have grown rapidly on the strength of investor enthusiasm and user adoption, but without the years of regulatory scrutiny that shaped the data practices of Google Search or Meta's social products. This lawsuit may be an early inflection point in how seriously courts, regulators, and users interrogate what AI search platforms actually do with the information they receive. For Perplexity specifically — which is reportedly preparing for a fundraise at a significantly elevated valuation — the timing is commercially sensitive.