The biggest tech giant Google fell into a new legal trouble. The company is facing a legal challenge from educational technology company Chegg, which claims that Google’s artificial intelligence-based search summaries have greatly hurt its traffic and revenue.
Google AI Summary Damages Traffic and Revenue
The lawsuit, filed in a federal district court in Washington, D.C., accuses Google of eroding demand for original content and damaging the digital publishing industry.
Google’s AI Overviews = theft 🚨
And Google just got smacked with a lawsuit by Chegg — and it’s utterly fantastic ⚖️
I’m a former commercial litigator turned online travel publisher — here are my notes from reading the complaint (link in next tweet) 👇
(warning, this summary…
— Nate Hake (@natejhake) February 25, 2025
Chegg, known for its textbook rentals, homework assistance, and tutoring services claimed that Google is using AI-generated information to retain users on its search platform instead of directing them to publishers’ websites. According to Chegg, this practice eliminates financial incentives for producing high-quality educational content and threatens the integrity of online information.
“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.
He also accused Google of profiting from Chegg’s content without compensation while forcing companies to share proprietary material to be included in search results.
In response, Google spokesperson Jose Castaneda refuted the allegations, calling them “meritless.” Castaneda affirmed that AI Overviews make search more useful and can drive traffic to a wider range of sources.“Every day, Google sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites,” Castaneda said.
Chegg’s financial struggles have been exacerbated by declining user engagement, with its stock plummeting over 98% from its 2021 peak. In November, the company announced plans to lay off 21% of its workforce and is now considering a sale or privatization.
This is the first time when Google has been accused of violating antitrust laws through AI-generated content. A similar case was filed in 2023 by an Arkansas newspaper. Both cases are being overseen by the U.S. District Judge Amit Mehta, who previously ruled that Google holds an illegal monopoly in online search.
Source: https://economictimes.indiatimes.com/news/international/global-trends/us-news-google-lawsuit-chegg-google-faces-massive-legal-setback-for-hurting-ai-with-traffic-that-sundar-pichai-said-helps-search-grow/articleshow/118579118.cms?from=mdr
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