Chegg, the online education platform, has filed a lawsuit against Google, alleging that the tech giant is abusing its dominant position in the search engine market. Reuters reports that the lawsuit concerns Google’s controversial AI Overviews, which Chegg claims are harming its business.
In the lawsuit filed on Monday, Chegg accuses Google of pressuring websites, including itself, into allowing their content to be scraped by Google’s AI tools without compensation. The company argues that Google’s shift from a ‘search engine’ to an ‘answer engine’ through AI Overviews is detrimental. By summarizing Chegg’s material in its AI-powered search summaries, Google allegedly diverts traffic away from Chegg’s website, significantly affecting its revenue. According to a company statement, Chegg’s net revenue declined by 24% year-over-year, and its stock price remains low.
“Our lawsuit is about more than Chegg — it’s about the digital publishing industry, the future of internet search, and about students losing access to quality, step-by-step learning in favor of low-quality, unverified AI summaries,” said Chegg CEO Nathan Schultz in a statement.
Chegg’s complaints mirror concerns expressed during the rise of AI chatbots like ChatGPT. The initial question was whether these AI tools would replace search engines, thus disrupting the internet ecosystem and Google’s advertising revenue. Google countered this potential threat by integrating AI Overviews into its search engine, which are enabled by default and reach approximately one billion users. Google has also integrated ads directly into these search summaries.
From the start, the AI summaries sparked concern among websites and news publishers. Google responded by incorporating inline links to the cited websites within the summaries, making them more visible. However, Google maintained that it would not share ad revenue with these websites.
Meanwhile, the quality of the summaries remains problematic, as they are frequently mocked for hallucinations, including recommending putting glue on pizza. Google, however, maintains that its AI summaries are beneficial for search.
