Education giant accuses Google of destroying business
American educational technology company Chegg has filed a lawsuit against Google, accusing the search giant of using its AI-generated overviews to undermine demand for original content and destroy publishers’ ability to compete in the market.
According to the lawsuit filed Monday in Washington, Google appropriates publishers’ content to keep users on its own site, destroying financial incentives for creating original materials. In the long term, this will lead to a “hollowed-out information ecosystem that will be neither useful nor trustworthy,” the company claims.
Chegg, based in Santa Clara (California), provides textbook rental services, homework help, and tutoring. The company claims that Google’s AI overviews have led to a significant drop in visitors and subscribers. The situation is so critical that, according to CEO Nathan Schultz, Chegg is now considering selling or leaving the public market.
“Our lawsuit is not just about Chegg – it affects the entire digital publishing industry, the future of internet search, and students’ access to quality step-by-step learning that is being replaced by low-quality, unverified AI summaries,” Schultz stated.
Chegg shares closed Monday at $1.57, which is 98% below their 2021 peak value. In November, the company announced a 21% staff reduction.
Google spokesperson Jose Castaneda called the claims unfounded: “With AI Overviews, people find search more useful and use it more often, which creates new opportunities for content discovery. Google sends billions of clicks to sites across the web every day, and AI Overviews directs traffic to more diverse resources.”
Chegg claims that publishers allow Google to index their sites to generate search results, which Google monetizes through advertising. In exchange, publishers receive search traffic. However, now, according to the company, Google is forcing publishers to allow their information to be used for AI overviews and other features, resulting in reduced site visitors.
This lawsuit is considered the first in which an individual company accuses Google of violating antitrust laws through the use of AI overviews. Earlier, in 2023, an Arkansas newspaper made similar claims in a class action lawsuit on behalf of the news industry.
