Online education company Chegg filed a lawsuit against Google on Monday, alleging that the tech giant’s AI-generated search overviews are eroding demand for original content and undermining publishers’ ability to compete.
The lawsuit, filed in Washington, D.C., claims Google is using publishers’ content to keep users on its platform, reducing financial incentives for content creation.
Chegg argued that Google’s AI overviews have led to a decline in its website traffic and subscribers, which has forced the company to consider a sale or a take-private transaction. “Our lawsuit is about more than Chegg – it’s about the digital publishing industry, the future of internet search, and about students losing access to quality, step-by-step learning in favor of low-quality, unverified AI summaries,” said Chegg CEO Nathan Schultz.
The Santa Clara-based company has seen a sharp decline in its stock value, closing at $1.57 on Monday, down more than 98% from its 2021 peak. In November, Chegg announced a workforce reduction of 21% as it struggled to adjust to declining demand.
Schultz claimed Google is profiting from the company’s content without compensation.
Google dismissed the allegations, defending its AI overviews as a tool that benefits users and content creators.
“With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered. Every day, Google sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites,” said Google spokesperson Jose Castaneda.
Chegg alleged that Google has pressured publishers to allow their content to be used for AI-generated overviews, which has resulted in fewer visitors to their websites. The company argued that Google’s actions violate antitrust laws by conditioning access to search results on publishers providing content for AI features.
The lawsuit is the first instance of a single company accusing Google of antitrust violations related to AI search overviews. A similar claim was made in 2023 by an Arkansas newspaper in a class-action lawsuit on behalf of the news industry.
U.S. District Judge Amit Mehta, who previously ruled that Google holds an illegal monopoly in online search in a case brought by the U.S. Department of Justice, is also overseeing the news publisher lawsuit. Google has said it will appeal the ruling and has requested the dismissal of the newspaper’s case.
