Chegg, a U.S.-based educational technology company, has filed a lawsuit against Google, accusing the tech giant of unfairly leveraging its artificial intelligence-generated search overviews to undermine publishers and erode demand for original content.
The lawsuit, filed in Washington, D.C., claims that Google is systematically co-opting publishers’ content to keep users engaged on its platform, thereby eliminating the financial incentives that drive content creation.
Chegg argues that this behavior is contributing to a deteriorating information ecosystem, where reliable, high-quality educational material is being replaced by AI-generated summaries that may lack depth and accuracy, Reuters news report said.
The lawsuit comes at a critical time for Chegg, which has reported a significant decline in website traffic and subscriber numbers since the introduction of Google’s AI overviews.
The company’s CEO, Nathan Schultz, stated that these challenges have forced Chegg to explore strategic alternatives, including a potential sale or a move to become a private entity. This decline is reflected in the company’s stock performance, with shares closing at $1.57, representing a drastic fall of over 98 percent from its peak in 2021. Additionally, in response to financial difficulties, Chegg laid off 21 percent of its workforce in November.
Google, however, has dismissed the claims as baseless. Company spokesperson Jose Castaneda defended the AI Overviews feature, arguing that it enhances the search experience and helps users find information more efficiently.
Jose Castaneda stated that AI Overviews actually drive more traffic to a wider variety of websites and that Google remains a key driver of online engagement by sending billions of clicks to external sites daily.
Chegg’s lawsuit is significant because it extends beyond its own business concerns to broader issues affecting the digital publishing industry.
Nathan Schultz emphasized that the case is not just about Chegg’s losses but about the future of online content, particularly for students who rely on step-by-step learning resources. He accused Google of profiting from educational content without providing fair compensation, ultimately threatening the sustainability of high-quality educational materials.
At the core of Chegg’s complaint is Google’s practice of using web publishers’ content to enhance its search results, a process that historically benefited publishers by driving traffic to their websites. However, Chegg claims that Google has increasingly pressured content providers to allow their material to be used in AI-generated summaries, which results in fewer users clicking through to the original sources. The lawsuit argues that this behavior violates antitrust laws by effectively forcing publishers to provide content without adequate compensation, a practice known as tying — where a dominant company conditions access to one service on the provision of another.
This lawsuit marks the first instance of an individual company directly accusing Google of antitrust violations related to its AI overviews. However, it is not the first legal challenge of its kind.
In 2023, an Arkansas-based newspaper filed a class-action lawsuit on behalf of the news industry, raising similar concerns about Google’s AI-driven content practices. That case is being overseen by U.S. District Judge Amit Mehta, who has already ruled in a separate Department of Justice lawsuit that Google holds an illegal monopoly in the online search market. Google has vowed to appeal that decision and has requested that the judge dismiss the newspaper’s case.
The outcome of Chegg’s lawsuit could have far-reaching implications for the digital publishing landscape, the use of AI in search engines, and broader antitrust enforcement against major technology companies. If successful, it could lead to stricter regulations on how Google and other tech giants leverage AI-generated content, potentially reshaping the dynamics of online information sharing and digital advertising.
Baburajan Kizhakedath
