U.S. educational technology company Chegg has filed a lawsuit in Washington, D.C. against Alphabet's Google, alleging that Google's AI-generated search overviews are negatively impacting web traffic. Chegg claims that Google's practice of creating AI-driven search summaries is eroding the demand for original content and undermining publishers' ability to compete.
Chegg, known for its online education services including textbook rentals, homework help, and tutoring, accuses Google of co-opting publishers' content to keep users on its platform, which in turn eliminates financial incentives for content creation. The company warns that this trend could lead to an "information ecosystem of little use and unworthy of trust."
Chegg argues that while Google monetizes publishers' content through advertising, it has increasingly pushed publishers to allow their content to be used for AI-generated summaries. This, according to Chegg, has resulted in a decrease in site visitors. The lawsuit contends that Google's actions violate laws prohibiting the conditioning of one product's sale on the provision of another.
CEO Nathan Schultz emphasized that the lawsuit is not just about Chegg, but about the digital publishing industry, the future of internet search, and the impact on students' access to high-quality learning materials. This is the first standalone antitrust lawsuit against Google over AI-generated content, marking a significant development in the tech industry.
Google dismissed the allegations as meritless, attributing the decline in website visitors and subscribers to Chegg's content to the benefits of AI overviews. Chegg's shares closed at $1.57 on Monday, reflecting a substantial decline from their peak in 2021. Schultz mentioned that Chegg is now exploring options including a sale or a take-private transaction in light of these challenges.
Overall, the lawsuit highlights growing concerns about the influence of AI-generated content on the digital publishing landscape and its implications for content creators, publishers, and users alike.
