The online education company alleges Google is eroding demand for original content and harming publishers’ ability to compete.
Chegg, a US-based educational technology company, has filed a lawsuit against Google, accusing the search giant of using AI-generated previews to erode demand for original content and undermine digital publishers.
The lawsuit, lodged in Washington, DC, alleges that Google’s AI Overviews—which provide users with quick, AI-generated answers—are reducing website traffic and revenue for companies that rely on search engines to direct users to their content.
Nathan Schultz, Chegg’s CEO, has warned that this could lead to a “hollowed-out information ecosystem”, where the internet is flooded with low-quality, AI-generated summaries instead of reliable, step-by-step learning resources.
Chegg’s complaint: Google is destroying digital publishing
Chegg, which offers textbook rentals, homework assistance, and tutoring services, has reported a significant drop in visitors and subscribers, which it blames on Google’s AI Overviews.
The company is now considering a sale or a take-private transaction, according to Schultz, reflecting the severe financial impact of Google’s practices.
“Our lawsuit is about more than Chegg,” Schultz said.
“It’s about the digital publishing industry, the future of internet search, and about students losing access to quality, step-by-step learning in favour of low-quality, unverified AI summaries.”
The lawsuit argues that Google’s AI Overviews eliminate the financial incentive for websites to publish high-quality educational material. By scraping publishers’ content to generate its own AI responses, Google keeps users on its own platform rather than directing them to the original sources.
This behaviour, Chegg claims, violates antitrust laws, specifically those that prohibit companies from conditioning the sale of one product on obtaining another product from the customer.
Google’s defence: AI overviews help drive traffic
Google has dismissed the lawsuit as “meritless,” insisting that AI Overviews enhance the search experience rather than diminish it.
Jose Castaneda, a Google spokesperson, stated:
“With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered. Every day, Google sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites.”
Google argues that it does not harm publishers but instead improves access to information while still driving clicks to external websites.
However, Chegg’s lawsuit challenges this assertion, claiming that Google has started coercing publishers into allowing their content to be used for AI Overviews while simultaneously reducing referral traffic to those sites.
Chegg’s financial struggles and industry-wide impact
The financial impact of Google’s AI changes has been devastating for Chegg.
- Chegg’s stock closed at $1.57 on Monday, down more than 98% from its peak in 2021.
- In November, the company announced it would lay off 21% of its workforce.
Chegg is one of many digital publishers struggling against AI-driven disruptions. As AI-generated content becomes more widespread, concerns are growing that original content creators will be left without a sustainable revenue model.
This lawsuit is seen as the first major challenge to Google’s AI Overviews under antitrust law.
Google’s monopoly: A growing legal battle
Chegg’s lawsuit is not the only legal action Google is facing over its AI practices and search engine dominance.
- In 2023, an Arkansas newspaper filed a class-action lawsuit against Google on behalf of the news industry, arguing that AI Overviews were stealing traffic from legitimate news publishers.
- US District Judge Amit Mehta—who ruled in a separate case that Google holds an illegal monopoly in online search—is overseeing the news publisher lawsuit.
Google has vowed to appeal the monopoly ruling and has asked the judge to dismiss the newspaper lawsuit.
The outcome of these cases could have major implications for the future of AI-generated content and how companies profit from search engine traffic.
Final thoughts: The future of the internet at stake?
Chegg’s lawsuit highlights a fundamental shift in the internet’s economic model—one where AI-generated content threatens to replace human-created material.
If Google continues to scrape and summarise content without properly compensating publishers, the risk is that high-quality educational and journalistic content will disappear, leaving users with less reliable, AI-curated information.
With regulators and publishers pushing back, the coming months will be crucial in determining whether Google’s AI-driven search strategy will be reined in—or whether it will continue to reshape the future of online information unchecked.