Meltwater’s strategy has helped it grow steadily. Its website boasts that the company now has more than 18,000 customers.
Some of Meltwater’s customers have defected from the AP. The complaint cites the U.S. Department of Homeland Security as a former AP subscriber that recently switched to Meltwater.
More than 100 other government agencies in the U.S. and other countries still subscribe to the AP.
The AP contends that Meltwater has an unfair advantage because it has avoided most licensing fees. Meltwater has endured recent legal battles in the U.K. and Norway, where a court ordered the company to pay $717,000 for copyright infringement in that country, according to the lawsuit.
The AP is seeking unspecified damages and court orders prohibiting Meltwater from future copyright infringement.
Meltwater began in 2001 in Oslo, Norway, according to its website. As a privately held company, Meltwater isn’t required to disclose its financial results. But in a recently published interview with VentureBeat, Lyseggen said the company employs about 900 people and had revenue of $114 million last year.
The AP, which is based in New York, was started by a group of newspapers in 1846 as a way to share news coverage. It now operates news bureaus 116 countries and employs about 3,700 people.
The AP’s revenue has dropped from a peak of $748 million in 2008 to $631 million in 2010. In 2010, the AP’s employee salaries, benefits and news coverage expenses totaled nearly $447 million, which devoured about 71 percent of the cooperative’s revenue.
The AP hasn’t released its financial results for last year.
“Meltwater free-rides on AP’s significant investments in gathering and reporting news,” AP acting general counsel Laura Malone said in a statement.
As its revenue shrinks, the AP has sought to wring more money from the Internet and mobile devices.
To identify copyright offenders, the AP helped develop a service called NewsRight that tracks the use of stories on websites, blogs and other Internet forums. NewsRight was spun off from the AP last July. It’s now backed by the AP and 28 other news organizations, including The New York Times Co. and The Washington Post Co.