Chegg has warned that this trend could weaken the information landscape, making it unreliable and less useful. [File Photo: REUTERS]
Google is facing a lawsuit from U.S. educational technology company Chegg, which alleges that the tech giant’s AI-generated search previews are damaging online publishers by reducing demand for original content. Chegg argues that Google's approach discourages users from visiting external websites, threatening the financial survival of digital publishers.
Chegg’s Legal Battle Against Google
Chegg, known for textbook rentals and online tutoring, filed the lawsuit in Washington, D.C., on Monday. The company claims that Google is unfairly leveraging AI-generated content to keep users within its search engine, eliminating incentives for content creators to publish educational materials.
The California-based company says its website traffic and subscriber numbers have plummeted since Google introduced AI summaries, directly impacting its business. As a result, CEO Nathan Schultz revealed that Chegg is exploring a potential sale or a transition to a private company.
Google Denies Allegations
In response, Google spokesperson Jose Castaneda dismissed the lawsuit as baseless. He stated that AI-generated search previews enhance user experience by offering quick and helpful summaries, which, according to him, actually increase exposure to a broader range of websites.
"Every day, Google directs billions of clicks to online publishers, and AI Overviews contribute to diversifying website traffic," Castaneda said.
However, Chegg insists that Google's AI-driven approach is stripping publishers of their ability to compete. The company warns that if this practice continues, the internet will become a "hollowed-out information ecosystem" where trustworthy and well-researched content is scarce.
Financial Struggles and Staff Layoffs
Chegg’s financial struggles have intensified in recent months. Its stock value closed at $1.57 on Monday, marking a steep decline of over 98% from its peak in 2021. The company also announced layoffs affecting 21% of its workforce last November.
Schultz accused Google of profiting from Chegg’s content without compensation, stating that the lawsuit isn’t just about Chegg, but about protecting the broader digital publishing industry. "This is about ensuring students continue to have access to quality, step-by-step learning resources instead of unreliable AI summaries," he said.
Google’s AI Overviews Under Scrutiny
Chegg claims Google is pressuring publishers to allow AI access to their content while offering nothing in return. The company argues that Google’s tactics violate antitrust laws by forcing businesses to give up their content in exchange for visibility in search results.
This case marks the first time a single company has accused Google of antitrust violations related to AI-generated search results. A similar lawsuit was filed in 2023 by an Arkansas newspaper on behalf of the new industry, accusing Google of harming digital journalism.
U.S. District Judge Amit Mehta, who previously ruled against Google in a Department of Justice antitrust case, oversees the lawsuit. Google plans to appeal the ruling and has requested that the judge dismiss the claims made by news publishers.
