Online education company Chegg has filed a lawsuit against Google, accusing the tech giant of using its AI-generated search overviews to undermine publishers and reduce demand for original content.
The lawsuit, filed Monday in Washington, D.C., claims that Google’s AI tools are keeping users on its platform and discouraging them from visiting external sites.
Chegg, which provides textbook rentals, homework help, and tutoring, alleges that Google is profiting off its content for free while eroding financial incentives for digital publishers. The company warns that this practice could lead to a “hollowed-out information ecosystem” where quality educational resources disappear.
The lawsuit comes at a time when Chegg is struggling financially. The company has seen a drop in website traffic and subscriber numbers, which it attributes to Google's AI-powered search results. As a result, Chegg’s CEO Nathan Schultz announced that the company is considering a sale or a take-private transaction.
Google Denies Allegations
Google spokesperson Jose Castaneda dismissed the lawsuit, calling the claims meritless.
“With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered,” Castaneda said.
Chegg, however, argues that Google’s AI tools limit site visits by displaying summarized answers directly in search results. The company says publishers allow Google to crawl their content in exchange for search-driven traffic, but Google's AI uses that same content to generate overviews, reducing the need for users to click through.
Legal and Industry Impact
Chegg’s lawsuit claims Google’s practices violate U.S. antitrust laws by forcing publishers to hand over content in order to remain visible in search results. This marks one of the first cases in which a single company has sued Google over AI-driven antitrust concerns.
A similar lawsuit was filed by an Arkansas newspaper in 2023 on behalf of the news industry, alleging that Google's AI tools hurt digital journalism. That case is being overseen by U.S. District Judge Amit Mehta, who previously ruled that Google holds an illegal monopoly in online search. Google is currently appealing that decision and has requested the dismissal of the newspaper’s case.
Meanwhile, Chegg’s financial troubles continue. The company’s stock closed at $1.57 on Monday, a 98% drop from its peak in 2021. Last November, Chegg announced it would lay off 21% of its workforce.
“This lawsuit is about more than Chegg – it’s about the future of internet search, digital publishing, and quality education,” said CEO Nathan Schultz. “Students deserve verified learning resources, not low-quality AI summaries.”
The case could have wide-reaching implications for AI-generated content and the digital economy, as Google faces increasing scrutiny over its dominance in online search and advertising.
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