In a lawsuit filed on Monday in Washington D.C., Chegg, a prominent online education platform offering textbook rentals, homework assistance, and tutoring services, has accused Alphabet’s Google of diminishing demand for original content and impeding the competitive landscape for publishers through its AI-generated summaries.
Chegg claims that Google is utilizing publishers’ content without proper compensation, thereby incentivizing users to remain on Google’s platform rather than visiting original sources. The lawsuit warns that this trend may ultimately lead to a “hollowed-out information ecosystem” that lacks reliability and value.
The California-based company has reported that its visitor and subscriber numbers have plummeted due to the prevalence of Google’s AI overviews. CEO Nathan Schultz noted that Chegg is contemplating a potential sale or a move to become a private entity in light of these challenges.
A spokesperson for Google, Jose Castaneda, dismissed Chegg’s allegations as without merit. He stated that AI Overviews enhance user experience by making search results more useful, which benefits content further by directing substantial traffic to various websites.
On Monday, Chegg’s shares closed at $1.57 (approximately Rs. 136), representing a staggering decline of over 98 percent from their peak value in 2021. Additionally, the company announced plans to reduce its workforce by 21 percent in November.
Schultz emphasized that Google is reaping economic benefits from Chegg’s content without providing fair compensation. “This lawsuit extends beyond Chegg; it addresses the broader issues facing the digital publishing industry, the future of internet search, and the potential decline in access to quality educational materials in favor of unverified AI-generated summaries,” he stated.
Publishers routinely permit Google to index their websites to generate search results, an arrangement that Google monetizes through advertising. In return, publishers benefit from increased site traffic when users click on their links, according to Chegg’s claims.
However, Chegg argues that Google has begun to pressure publishers into allowing the utilization of their content for AI overviews and other features that ultimately lead to reduced traffic to their own sites.
The complaint alleges that Google’s behavior infringes upon laws prohibiting conditions on the sale of one product based on the buyer providing another product to the supplier.
This lawsuit is reportedly the first instance of a company directly accusing Google of violating antitrust laws through its AI overviews. Previously, an Arkansas newspaper had made comparable assertions against Google in a class action suit on behalf of the news industry in 2023.
The case involving the newspaper is being overseen by US District Judge Amit Mehta, who previously ruled that Google maintains an illegal monopoly in online search, as established in a case brought forth by the US Department of Justice. Google has indicated intentions to appeal this ruling and has requested the dismissal of the newspaper’s case.
© Thomson Reuters 2025
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