Online education company Chegg filed a lawsuit against Google on Monday, claiming that Tech Giant’s AI-generated search summary will erode demand for the original content and undermine the publisher’s competitive ability.
The lawsuit filed in Washington, DC alleges that Google uses publisher content to keep users on the platform, reducing financial incentives for creating content.
Chegg claimed that Google’s AI overview reduced website traffic and subscribers. “Our lawsuits are more than Chegg. It concerns students who lose access to gradual learning in quality in favor of the digital publishing industry, the future of internet search, and low-quality, unverified AI summaries,” says Chegg CEO Nathan Schultz.
The Santa Clara-based company saw its share price drop sharply, closing at $1.57 on Monday, down more than 98% from its 2021 peak. In November, Chegg announced a 21% workforce cut as it struggled to adapt to declining demand.
Schultz claimed that Google was profiting from the company’s content without compensation.
Google rejected the claim and defended the AI overview as a tool that benefits users and content creators.
“An AI overview creates new opportunities for people to find searching more useful and use it more and discover content,” said Jose Castaneda, Google spokesman.
Chegg claimed that Google put pressure on publishers to use content for AI-generated overviews, resulting in fewer visitors to the website. The company alleged that Google’s actions violated antitrust laws by conditioning them on access to search results from publishers that provide content with AI features.
The lawsuit is the first case of a single company accusing Google of an antitrust violation related to AI search overviews. A similar claim was made by an Arkansas newspaper in a class action lawsuit on behalf of the news industry in 2023.
US District Judge Amit Metah has ruled that Google holds an illegal monopoly in an online search in a case filed by the U.S. Department of Justice, but he oversees the lawsuits of news publishers. Google said it appealed the ruling and called for fire in the newspaper’s case.
