Adding to the growing number of lawsuits against big tech’s AI developments, Chegg, an edtech company specializing in textbook rentals and tutoring, is suing Google. It alleges that Google’s “AI Overviews” feature, prominently placed in search results, has negatively affected its traffic and revenue.
What happened? You may have noticed Google’s AI overviews, which summarize search results before listing source articles. Chegg, an online education provider, is alleging that this feature has caused a substantial drop in its website visitors and subscribers. According to Nathan Schultz CEO of the California-based company, this negative impact has prompted the company to contemplate a change in ownership structure.
In the lawsuit, Chegg accuses Google of stealing content from publishers, and using it within Google’s search results, in a way that discourages users from visiting the publishers’ original websites, thereby undermining publishing incentives. Chegg argues that this could lead to a degraded information ecosystem characterized by shallowness, untrustworthiness, and diminished utility.
Schultz alleges Google is profiting from Chegg’s content without fair compensation. However, he claims that the lawsuit addresses wider issues, including the digital publishing sector, the direction of internet search, and the threat of students substituting quality education with unverified AI-generated summaries.
Google has refuted these claims. Google spokesperson Jose Castaneda contends that AI Overviews make search more beneficial, encourage greater usage, and foster content discovery. He also claims that Google sends billions of clicks to websites daily and that AI Overviews contribute to a more diversified distribution of web traffic.
Why are there issues with the AI feature at this time? According to Chegg, there is an agreement between Google and publishers where Google is allowed to index publishers’ websites for search results, which it monetizes through ads. In return, publishers gain website traffic from user clicks on those results. Chegg is alleging that Google is now compelling publishers to allow their content to be used for AI summaries, resulting in decreased site traffic, a practice it alleges violates antitrust regulations.
Google is not new to antitrust challenges. In 2020, the Department of Justice filed a landmark case against the company, and the subsequent ruling affirmed Google’s monopoly. Chegg cites this ruling to support its current antitrust allegations.
Whether the AI Overview feature will be adjusted to address publishers’ grievances or if a new agreement can be negotiated remains unclear.