Chegg, a leading online education company, has filed a lawsuit against Google, alleging that the tech giant’s AI Overviews are harming its business by reducing traffic and undermining the digital publishing industry. Chegg claims that Google is using its AI to keep users on its own platform, thereby eroding the financial incentives for publishers to create original content.
The lawsuit, filed in Washington, D.C., argues that Google’s actions are unfair and violate antitrust laws. Chegg’s CEO, Nathan Schultz, stated that Google is profiting from Chegg’s content without compensation, which has led to a significant decline in visitors and subscribers. As a result, Chegg is considering strategic alternatives, including a potential sale or going private.
Google responded by calling the claims meritless, stating that its AI Overviews enhance search functionality and send traffic to a diverse range of sites. However, Chegg maintains that this practice creates a “hollowed-out information ecosystem” where users rely on unverified AI summaries rather than quality educational content.
Chegg’s stock has plummeted, closing at $1.57 on Monday, down over 98% from its peak in 2021. The company recently announced layoffs and is exploring options with Goldman Sachs.
The lawsuit highlights broader concerns about Google’s dominance in the search market and its impact on the digital publishing industry. It follows a federal ruling that Google holds an illegal monopoly in online search, a decision Google plans to appeal.
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