Reddit sues Anthropic: why this is an important case for AI

Why Reddit Sued Anthropic

Reddit has sued Anthropic for allegedly unauthorized use of the platform’s data to train its artificial intelligence models, particularly the Claude chatbot. Reddit claims that Anthropic made over 100,000 accesses to the platform’s data despite the prohibition specified in the robots.txt file, used to block scraping bots.

Reddit accuses Anthropic of violating the terms of service and unjustly enriching itself by using the platform’s contents without user consent. The company states it has already struck licensing agreements with other companies like Google and OpenAI, which ensure regulated use of the data.

Reddit seeks damages, payment of the sum gained through unjust enrichment, and an injunction prohibiting the use of data for commercial purposes.

The Clash Between Reddit and Anthropic Over AI and Copyright

Reddit’s choice to structure its legal action primarily on unfair competition principles, rather than mere copyright violation, highlights the growing limitations of traditional legal apparatus in protecting digital content and signals the emergence of new interpretive frameworks more adequate to the complexities of the artificial intelligence economy.

This methodological approach assumes particular relevance considering that Reddit’s contents, being predominantly composed of user posts and comments, risk presenting decidedly controversial copyright protection profiles, making the unfair competition strategy not only preferable, but a preferential path for obtaining effective legal protection.

The Limits of Copyright Protection on User-Generated Content

The legal architecture of copyright, developed to protect traditional creative works characterized by a significant degree of originality and creativity, encounters evident application difficulties in the context of content generated by users of digital platforms. Reddit posts, thread discussions, comments and social interactions might not surpass the originality threshold required for full copyright protection, instead configuring as forms of daily communication lacking the creativity requirement necessary for the attribution of copyright.

This structural gap in the traditional copyright system creates what we could define as a “protection gap” that could be particularly problematic in the era of artificial intelligence, where the economic value of content doesn’t reside in their individual creativity, but in their aggregate capacity to constitute training datasets for machine learning systems. This emerging value risks escaping traditional interpretive categories of copyright, therefore requiring alternative and more flexible legal instruments.

The Fair Use Doctrine in AI Training and Its Application Uncertainties

The fair use doctrine, invoked by Big Tech to justify the use of otherwise protected content, also presents a series of interpretive ambiguities, not easily overcome, that make uncertain its application to the generative artificial intelligence sector.

The transformative character of use, one of the central elements in fair use evaluation, proves difficult to define in the context of training linguistic models, where original contents undergo statistical processing that profoundly alters their nature without necessarily creating directly recognizable versions of them.

American jurisprudence has not yet consolidated a uniform orientation on the question, therefore creating a context of legal uncertainty that has made the non-exclusive recourse to copyright as a protection instrument somewhat necessary. This situation of uncertainty consequently pushes toward the adoption of alternative legal strategies, such as unfair competition, characterized by greater interpretive flexibility and greater capacity to adapt to new digital economic realities.

California’s Unfair Competition Law as an Expansive Protection Tool

California’s Unfair Competition Law (California Business and Professions Code Section 17200 et seq.) offers a significantly more flexible and comprehensive legal framework compared to traditional copyright. California regulation defines as illicit any commercial practice that is “unlawful, unfair, or fraudulent,” creating a tripartite category that allows capturing potentially harmful conduct even when it doesn’t constitute violations of specific intellectual property rights.

This broad and inclusive formulation would allow overcoming some categorical criticalities of copyright, enabling a more comprehensive evaluation of commercial conduct and their competitive impact. In the Reddit v. Anthropic case, this approach would therefore allow focusing attention not so much on the legal nature of individual appropriated contents, but on the method and economic impact of the appropriation itself, shifting the focus from ownership to fairness of commercial practices, that is, from property to principles of competitive equity.

The unfair competition theory also allows effectively applying the principle of unjust enrichment, particularly relevant in the context of data harvesting for artificial intelligence. Anthropic has developed a business model worth $61.5 billion using, according to Reddit’s allegations, contents appropriated for free and without consent, thus configuring an evident economic imbalance between the value created and the compensation paid to the original content creators.

This approach would allow quantifying damage not only in terms of violation of specific rights, but especially in terms of illegitimately transferred economic value, opening potentially broader and more realistic compensation prospects compared to traditional copyright infringement damages.

robots.txt Violation

An additional allegation concerns the possibility that Anthropic deliberately ignored the directives contained in the robots.txt files present on Reddit. The robots.txt constitutes an industrially recognized technical standard that formalizes access restrictions imposed by website owners, creating a sort of “technical contract” whose violation highlights the bad faith of the subject performing scraping.

This technical-contractual dimension would strengthen Reddit’s position, insofar as it would have been known to Anthropic what the restrictions imposed through robots.txt were, with a violation that would therefore be aggravated by a willful subjective element.

Data Licensing and Competitive Harm

Another crucial element in Reddit’s legal strategy lies in demonstrating the existence of a legitimate market for licensing digital content destined for training AI systems. The agreements stipulated by Reddit with Google ($60 million annually) and OpenAI clearly demonstrate the existence of a recognized and quantifiable economic value for access to the platform’s contents.

This contractual evidence therefore constitutes direct proof of the competitive damage suffered by Reddit, configuring the free appropriation operated by Anthropic as a distortion of the competitive dynamics of the data licensing market. The market price established in legitimate agreements also provides, an aspect of absolute relevance, an objective parameter for quantifying the economic damage suffered.

Anthropic’s conduct, if confirmed, would therefore damage not only Reddit but the entire economic ecosystem emerging around data licensing for artificial intelligence. The free appropriation of content that other operators acquire through regular commercial agreements indeed feeds that competitive distortion that can compromise the economic sustainability of the entire data licensing business model on which the Generative AI ecosystem is being founded.

This systemic perspective reinforces the configuration of unfair competition, demonstrating that the effects of Anthropic’s conduct extend beyond the bilateral relationship with Reddit, negatively impacting the competitive dynamics of the entire sector and the formation of a fair and sustainable market for training data licensing.

Reddit vs. Anthropic: Strategic and Procedural Implications

The approach based on unfair competition presents significant evidentiary advantages compared to traditional copyright enforcement. While copyright violation requires demonstrating complex technical elements such as work originality, the existence of protection and effective substantial copying, unfair competition focuses on more easily demonstrable elements such as the existence of a commercial practice, its unfair character and negative economic impact.

This simplification of the evidentiary burden is particularly relevant in the artificial intelligence context, where direct demonstration of reproduction of specific contents in trained models presents considerable technical challenges, while demonstrating dataset use and economic impact proves more accessible and convincing for judges.

The configuration of unfair competition opens, as mentioned earlier, potentially broader compensation prospects compared to traditional copyright. While copyright infringement damages are typically limited to lost profits and actually demonstrable damages, unfair competition would abstractly allow requesting restitution of all illegitimately obtained enrichments by the subject who engaged in unfair conduct.

From Fair Use to “Business Fairness” for Copyright with AI

American jurisprudence has shown growing difficulties in applying the traditional fair use doctrine to content generated by artificial intelligence. A paradigmatic example is represented by the Warhol vs. Goldsmith decision of the U.S. Supreme Court, which as analyzed “can set precedent also in matters of artificial intelligence and graphic generation software,” since “the implications of this decision will undoubtedly have a relevant impact in the fields of art, entertainment and journalism, as well as in the specific area of artificial intelligence applied to photography and graphics.”

This restrictive jurisprudential orientation on fair use therefore confirms the necessity of alternative protection instruments like unfair competition, which don’t depend on copyright’s interpretive uncertainties but are based on clearer principles of commercial fairness. The same difficulty in applying fair use emerges from the first judicial decisions specifically dedicated to AI, where “after months of waiting for decisions from U.S. judicial bodies, came the first judicial setback for three American artists who had sued Stability AI,” highlighting how “the extreme difficulty that the artists’ lawyers faced in setting up a lawsuit” based exclusively on copyright.

The Reddit v. Anthropic controversy is therefore configured as a potential leading case destined to influence the evolution of American and European technological jurisprudence. The strategic choice to privilege unfair competition over copyright could indeed inspire a new generation of litigation characterized by greater pragmatism and interpretive flexibility.

This jurisprudential evolution appears particularly necessary considering the speed of development of artificial intelligence technologies, which often exceeds the adaptation capacity of traditional legal categories. The approach based on fairness of commercial practices rather than rigid application of specific property rights could offer greater adaptability to future technological evolutions.

The Influence on European Regulatory Frameworks and Italian Jurisprudence

The precedent established by the Reddit-Anthropic case could also significantly influence the development of future regulatory frameworks for artificial intelligence. The emphasis on unfair competition and fairness of commercial practices indeed aligns with emerging regulatory trends, such as the European AI Act, which privilege approaches based on general principles over more rigid “regulatory containers.”

The integration between contractual protection, unfair competition and principles of economic competitive equity could constitute the model for a new generation of technological regulations characterized by greater flexibility and capacity to adapt to rapid evolutions in the artificial intelligence sector.

The American experience of the Reddit v. Anthropic controversy could also play a decisive role in the evolution of Italian doctrine and jurisprudence, grappling with analysis related to the most disparate scraping practices. The approach based on unfair competition rather than mere copyright could indeed be inspiration for innovative legal strategies also in the Italian context, where the greater flexibility of article 2598 and following of the Civil Code offers interpretive instruments potentially more suited to the complexities of the artificial intelligence economy.

In this perspective, the paradigm emerging from the American controversy could constitute a precious reference point for the definition of new protection standards in the Italian legal system, contributing to the evolution of a more balanced and effective technological law in the era of generative artificial intelligence.

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REPRODUCTION RESERVED

Author: Alfredo Esposito – Studio Legale Difesa d’Autore