Why it matters: Education platform Chegg is taking unprecedented legal action against Google, becoming the first individual company to file an antitrust lawsuit over Google’s AI Overviews feature. The case could establish significant precedent for how tech giants utilize other companies’ content in AI-generated search results.
Traffic plummets as AI summaries replace website visits
Chegg reports its non-subscriber traffic has crashed to negative 49% in January 2025, directly attributing the decline to Google’s AI-generated summaries that provide answers without requiring users to click through to Chegg’s site.
The education company reported a net loss of $6.1 million on $143.5 million in fourth-quarter revenue — a 24% year-over-year decline.
Lawsuit alleges unfair exploitation of proprietary content
Chegg’s lawsuit, filed Monday, claims Google is leveraging its search dominance to pressure businesses into allowing their content to be used for AI features without compensation.
“Google is unfairly benefiting from Chegg’s proprietary content without incurring any costs,” CEO Nathan Schultz says, emphasizing the case has implications beyond just his company, potentially affecting the entire digital publishing ecosystem.
Google defends AI features as beneficial to web publishers
Google spokesperson Jose Castaneda responds that AI Overviews actually enhance traffic to a broader range of sites and that Google continues to direct billions of clicks to various websites daily.
Strategic review underway as company considers options
The revenue impact has forced Chegg to initiate a strategic review process, with options including potential acquisition or going private.
The lawsuit joins a growing trend of content creators and publishers alleging misappropriation of proprietary material by AI companies, making it a closely watched case for the future of AI-generated content.