Google sued by Chegg over AI Overviews hurting traffic and revenue

Chegg, an education technology company, is suing Google, alleging that Google's AI Overviews feature harms Chegg's traffic and revenue. Chegg claims AI Overviews significantly impacts its acquisitions, revenue, and employees, diverting traffic away from its platform and utilizing Chegg's content without compensation.

Chegg's lawsuit highlights three key arguments: reciprocal dealing (Google requiring content submission for search inclusion), monopoly maintenance (Google leveraging its dominance to stifle competition), and unjust enrichment (Google profiting from Chegg's content without payment). The company cites a dramatic drop in non-subscriber traffic (down 49% in January 2025) as direct evidence of AI Overviews' negative impact. Chegg argues this affects not only its business but also student access to quality learning resources and the broader digital publishing industry. They've engaged Goldman Sachs for strategic options and Susman Godfrey for legal representation.

Google counters that AI Overviews enhance user experience and increase traffic to diverse websites, including billions of clicks daily.

The outcome of this lawsuit remains uncertain, but it represents a significant legal challenge to Google's AI Overviews and could potentially reshape how search engines interact with content creators and publishers. This case may set a precedent for future disputes concerning the use of AI-generated content and the impact on third-party websites. Chegg's financial struggles, with a current valuation under $200 million and stock trading near $1 per share, underscore the gravity of the situation. Their Q4 2024 revenue significantly missed analyst expectations, further highlighting the alleged impact of Google's AI Overviews.

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