Alphabet's Google search engine is alleged to diminish the demand for original content and hinder publishers' competitiveness with its AI-generated summaries, a U.S.-based educational technology company stated in a lawsuit filed on Feb 24.
Chegg, an online education provider offering textbook rentals, homework assistance, and tutoring, accused Google in a lawsuit filed in Washington, D.C., of appropriating publishers' content to retain users on its own platform, eliminating their financial motivation to publish.
The lawsuit warned of a future "hollowed-out information ecosystem" lacking usefulness or credibility. Chegg reported a decrease in traffic and subscribers due to Google's AI summaries, prompting consideration of a sale or going private, according to CEO Nathan Schultz.
Google's spokesperson, Jose Castaneda, dismissed the allegations as baseless, highlighting the benefits of AI-generated content summaries in enhancing user experience and increasing site traffic diversity.
Chegg shares plummeted on Monday, reaching $1.57, a drastic drop from its peak value in 2021. The company also announced a significant workforce reduction in November.
Schultz criticized Google for leveraging their content without compensation, emphasizing broader concerns regarding digital publishing, internet search practices, and students' access to quality educational materials versus AI summaries.
In exchange for the search traffic directed to their sites, publishers permit Google to index their web content for search results, a process that Google monetizes through advertising. However, Chegg accused Google of pressuring publishers to use their content for AI summaries, leading to reduced site traffic.
Chegg argued that Google's practices breach antitrust laws by conditioning access to one product on accepting another, a claim not previously litigated against Google regarding AI features. A similar lawsuit brought by an Arkansas newspaper representing the news industry faces U.S. District Judge Amit Mehta, who previously handled another case against Google by the U.S. Department of Justice on online search practices, an issue Google plans to appeal.
In response to the newspaper's case, Google seeks its dismissal.