Chegg Sues Google Over AI Overviews
Chegg, an online education company, has filed a lawsuit against Google, accusing the tech giant of unfair competition through its AI-generated search summaries. The lawsuit claims that Google’s AI Overviews are siphoning traffic away from content creators and using their content to keep users on its platform, damaging their ability to generate revenue and eliminating incentives for students to visit the original site.
“This will eventually lead to a ‘hollowed-out information ecosystem of little use and unworthy of trust,’” Chegg stated in the complaint. The company alleges that Google's practices have led to a significant decline in site traffic and subscriptions, forcing them to consider drastic measures such as a potential sale or going private.
Chegg CEO Nathan Schultz directly linked the lawsuit to the company’s financial troubles. “We would not need to review strategic alternatives if Google hadn’t launched AI Overviews,” he said. The company reported that non-subscriber traffic dropped by 49% in January 2025, a steep decline from the 8% drop seen in mid-2024. Chegg’s stock has also plummeted—losing more than 95% of its value since OpenAI launched ChatGPT in 2022.
In the lawsuit, Chegg points out that publishers allow Google to crawl their websites in exchange for traffic. However, the company claims that Google is now coercing content providers into allowing their material to be used in AI-generated summaries, which appear at the top of search results. This, according to Chegg, leads to fewer visitors clicking through to the original sites.
Google denies the accusations, calling them meritless. “With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered,” Google spokesperson Jose Castaneda said. The company maintains that it still directs billions of clicks to publishers.
Chegg’s lawsuit draws attention to a broader debate about the role of AI in search. Many publishers argue that AI-generated summaries are reshaping how information is consumed online, making it harder for content creators to sustain their businesses. Google, on the other hand, insists that AI Overviews improve user experience by providing quick and relevant answers.
Chegg’s financial struggles have only intensified. The company reported a $6.1 million net loss for the last quarter, with revenue falling 24% year over year. It also expects first-quarter revenue to be well below analyst predictions. These challenges have led Chegg to engage Goldman Sachs to explore possible strategic options, including acquisition or privatization.
Despite its legal battle, Chegg is developing its own AI tools. The company has partnered with OpenAI, Anthropic, and Mistral to enhance its AI-powered educational services. However, Schultz acknowledged that competing with Google and other AI-driven platforms remains an uphill battle.
This lawsuit comes as Google faces increasing scrutiny over its dominance in online search. A federal judge ruled last year that Google holds an illegal monopoly in the market, and the Department of Justice is pushing for restrictions on its AI-related acquisitions. Chegg’s case could add more pressure on regulators to take action.
While the outcome of the lawsuit remains uncertain, its impact could be far-reaching. If Chegg succeeds, it could force Google to rethink how it integrates AI into search. If not, it may set a precedent that allows AI-driven platforms to continue leveraging publisher content without direct compensation.
