A federal judge delivered Reddit a significant legal victory on July 31, 2026, largely denying web scraping service SerpApi's motion to dismiss. The decision allows Reddit's central claims under the Digital Millennium Copyright Act (DMCA) to proceed toward discovery.

The Court's Ruling

US District Judge Paul A. Engelmayer of the Southern District of New York found that Reddit had plausibly alleged a conspiracy between SerpApi and Perplexity AI. Under the motion-to-dismiss standard, the court accepts the plaintiff's factual allegations as true and assesses only whether they state a plausible claim — meaning the case now moves into the evidence-gathering phase rather than reaching a judgment on the merits.

According to the complaint, SerpApi supplied a product designed to circumvent Google's access controls, while Perplexity AI financed its use.

Reddit contends that Perplexity AI avoided scraping Reddit's platform directly, instead routing its data collection through Google search results with SerpApi acting as the technical intermediary. The result, Reddit asserts, was the large-scale harvesting of hundreds of billions of search results containing user posts and comments — all used for AI training without any licensing agreement or compensation paid to Reddit.

Reddit originally filed the lawsuit on October 22, 2025. In addition to SerpApi and Perplexity AI, the complaint names Oxylabs UAB and AWMProxy as co-defendants.

Reddit states that the unauthorized scraping caused concrete financial harm, including lost licensing revenue and increased operational costs from deploying new security measures to protect its content. The company is pursuing both damages and injunctive relief.

Google's Parallel Case Dismissed

Eleven days before Judge Engelmayer denied SerpApi's dismissal motion, a separate DMCA lawsuit brought by Google against SerpApi was dismissed on July 20, 2026. That case was dismissed for lack of standing — the court found Google could not establish it was the proper party to bring the claim. Reddit's case, by contrast, survived on the substantive merits of its pleading, marking a meaningfully different outcome from Google's procedural failure.

Implications for AI Companies

Since its public listing in March 2024, Reddit has made data licensing a central pillar of its revenue strategy, securing agreements with multiple AI firms. A favorable outcome in this litigation would reinforce that positioning and strengthen Reddit's negotiating position in future licensing discussions.

The lawsuit is part of a broader wave of litigation in which content owners and platforms have alleged unauthorized use of their data in AI model training. The outcomes of these cases are being closely watched because they could shape how AI companies obtain training data — through licensing, scraping, or intermediaries — and what legal exposure exists under existing copyright and access-control statutes.

Perplexity AI, a privately held company, has faced multiple copyright-related allegations over the past year. The resolution of this case carries implications for Reddit's stock performance and its capacity to expand licensing revenue going forward.