Edtech Company Chegg Sues Google Over AI OverviewsBy John P. Mello Jr.February 26, 2025 5:00 AM PT ADVERTISEMENTQuality Leads That Turn Into DealsFull-service marketing programs from TechNewsWorld deliver sales-ready leads. Segment by geography, industry, company size, job title, and more. Get Started Now. An education technology company is taking Alphabet and Google to court over AI overviews displayed with search results.The company, Chegg, of Santa Clara, Calif., announced Monday that it is filing the lawsuit in the U.S. District Court in the District of Columbia, alleging Google unfairly exercises its monopoly power within search and other anti-competitive conduct to muscle out companies like Chegg.In a press release announcing its 2024 fourth-quarter earnings, Chegg reported total net revenue of US$143 million, a 24% year-over-year decline. CEO Nathan Schultz stated in the release that, in addition to the lawsuit, the company was exploring a range of alternatives to maximize shareholder value, including being acquired, undertaking a go-private transaction, or remaining as a public standalone company.These two actions are connected, as we would not need to review strategic alternatives if Google hadnt launched AI Overviews, or AIO, retaining traffic that historically had come to Chegg, materially impacting our acquisitions, revenue, and employees, he said.Chegg has a superior product for education, as evident by our brand awareness, engagement, and retention, he continued. Unfortunately, traffic is being blocked from ever coming to Chegg because of Googles AIO and their use of Cheggs content to keep visitors on their own platform.In its court filing, Chegg argues that Google forces companies to supply proprietary content in order to be included in Googles search function, unfairly exercises its monopoly power within search, and reaps benefits from Cheggs content without paying for it.In a statement provided to TechNewsWorld by Google spokesperson Jos Castaeda, the company countered: With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered. Every day, Google sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites. We will defend against these meritless claims.AI Overviews Threaten Content CreatorsBen James, founder of 404, Bittensor Subnet 17, an online 3D content creation company, explained that Googles AI-generated overviews act as a shortcut that provides users with essentially a summary without requiring that they visit the original source of information. This, in turn, affects the traffic to the publishers websites, which would then impact their ad revenue and subscription models, he told TechNewsWorld.If users are no longer required to visit the site of the source info or read full articles, publishers may eventually lose incentives to produce in-depth, high-quality pieces, he said.These overviews can satisfy immediate information needs, reducing the incentive to engage with more detailed and investigative reporting, added Mark N. Vena, president and principal analyst at SmartTech Research in Las Vegas.As a result, he told TechNewsWorld, publishers could see a decline in website traffic and ad revenue, weakening their financial viability. This shift ultimately undermines the competitive landscape for original content, as quality journalism struggles to compete with readily available, AI-curated summaries.AI Overviews could have a devastating effect on original content providers, including news organizations, observed Dan Kennedy, a professor of journalism at Northeastern University, in Boston.The entire news ecosystem of the web has been built on driving traffic to media sites in order to show users advertising and entice them to subscribe, he told TechNewsWorld. Now that vitally important link between the search engine and the news organization is being broken.Since Google remains the default starting point for most searches, its use of AI is likely to be far more harmful than, say, ChatGPT, he added.Doom Loop for News IndustrySearch overviews could also create a less-than-virtuous cycle for many websites. It could create a doom loop, JD Harriman, a partner with the Foundation Law Group, in Burbank, Calif., told TechNewsWorld.When a company has less traffic, and therefore less revenue, overhead must be cut, which could mean reducing content, staff, etcetera, which makes the site less interesting, which means even less traffic, and more cuts creating a vicious circle, he told TechNewsWorld. Vena added that without sufficient financial support, news organizations may cut back on investigative journalism and fact-checking, resulting in a less informed public.This shift could also contribute to a homogenized media landscape where sensationalism or clickbait content predominates over rigorous, original reporting, he said. Ultimately, the decline in original content undermines accountability, transparency, and the overall health of the democratic discourse.The erosion of demand for original content will lead directly to less production of original content, which will harm all of us including the AI chatbots that scrape it for its own profit-driven purposes, Kennedy noted.There will be some challenges to Chegg winning its case against Google.Legally, this appears like it will be a tough battle. While content publishers have a valid argument that Google is profiting from their work without fair compensation, courts have historically been slow to impose strict limitations on tech giants and time here is critical, Martin Balaam, CEO and founder of Pimberly, a global product information management platform, told TechNewsWorld.That said, he continued, regulatory scrutiny around AI and digital monopolies is increasing, so this case could potentially set quite an important precedent.Fair Use or Abuse?Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm in Bend, Ore., pointed out that summarizing something generally falls within fair use under the Copyright Act of 1986. It allows for the fair use of copyrighted material for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.What Google did could be argued is part of the research exclusion, he told TechNewsWorld.Its a bit of a long shot, especially since its dire condition is more a byproduct of ChatGPTs existence, added Greg Sterling, co-founder of Near Media, a market research firm in San Francisco.However, he told TechNewsWorld, the claims probably wont be dismissed immediately.If Chegg has any success, others will follow suit, so to speak, he said. But the problem is that no individual publisher is entitled to traffic, and Google is entitled to have some control over its search results. In Europe, however, this action would find greater sympathy and be seen as having merit.Vena maintained that the lawsuit faces significant legal uncertainties. Courts have not yet clearly defined the balance between AI-generated content and the protection of original journalism, he explained. Its success will depend on nuanced interpretations of copyright law, fair use, and the demonstrated economic impact on publishers factors that can vary widely by jurisdiction.Consequently, he added, while the plaintiffs raise legitimate concerns, predicting a favorable outcome remains highly speculative at this stage.John P. Mello Jr. has been an ECT News Network reporter since 2003. His areas of focus include cybersecurity, IT issues, privacy, e-commerce, social media, artificial intelligence, big data and consumer electronics. He has written and edited for numerous publications, including the Boston Business Journal, the Boston Phoenix, Megapixel.Net and Government Security News. Email John.Leave a CommentClick here to cancel reply. Please sign in to post or reply to a comment. New users create a free account.More by John P. 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