Chegg, which has employed the same law firm leading The New York Times’ suit against AI developers, is taking a new approach in its lawsuit against Google over “data appropriation.”
In the rapidly evolving landscape of artificial intelligence, the use of proprietary data for training and generating content has become a contentious issue. Educational technology company Chegg has recently filed a lawsuit against Google, alleging that Google’s AI-generated “Overviews” directly appropriate Chegg’s proprietary content, thereby threatening its business model. This legal action underscores the growing tension between content creators and AI developers over data usage rights.
Background on Chegg’s Challenges with AI
Chegg, once a prominent provider of online educational resources, has faced significant challenges due to the rise of AI technologies. The company’s struggles began with the advent of OpenAI’s ChatGPT, which offered students free, instant answers to their academic queries, diminishing the demand for Chegg’s subscription-based services. This shift led to a substantial decline in Chegg’s user base and financial performance.
In a candid acknowledgment of the impact of AI on Chegg’s business, CEO Dan Rosensweig stated, “We can all see that AI technology is evolving at a very rapid pace, and at Chegg we are embracing it aggressively and immediately.” Despite efforts to integrate AI into its own offerings, such as the development of CheggMate in collaboration with OpenAI, the company continued to experience a decline in subscribers and revenue.
The financial repercussions were severe. Chegg’s stock plummeted nearly 90% over the past year, trading at just above $1 per share, reducing the company’s valuation to approximately $110 million. Additionally, the company reported a 13% decline in subscribers to 3.8 million during the third quarter compared to the previous year. These challenges prompted Chegg to consider strategic alternatives, including going private or selling the company.
The Lawsuit Against Google
In February 2025, Chegg filed a federal antitrust lawsuit against Google, alleging that Google’s AI Overviews have significantly diminished its website traffic and revenue. The lawsuit claims that Google’s AI Overviews provide users with direct answers to their queries, reducing the need to visit third-party websites like Chegg. Chegg argues that this practice allows Google to benefit from Chegg’s proprietary content without proper compensation, thereby harming Chegg’s business operations.
Chegg’s CEO, Nathan Schultz, criticized Google’s approach, stating that the company has “unjustly retained traffic that has historically come to Chegg, impacting our acquisitions, revenue, and employees.” He described Google’s actions as “harmful and unsustainable,” emphasizing the detrimental effect on Chegg’s financial performance and workforce.
In response, Google spokesperson José Castañeda defended the company’s AI Overviews, asserting that they enhance the search experience and direct traffic to a greater variety of websites. He stated, “With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered.” Google maintains that its AI features benefit both users and content creators by improving content discovery.
How Chegg’s Approach Differs from Other AI-Related Lawsuits
Chegg’s lawsuit against Google presents a unique approach compared to other legal actions involving AI and content usage. While many lawsuits focus on the unauthorized use of copyrighted material to train AI models, Chegg’s case centers on the monopolistic practices of Google in leveraging its dominant position in the search engine market to appropriate and monetize content without proper compensation: Chegg’s lawsuit emphasizes that Google’s AI Overviews exploit its monopoly power to force companies into providing content without financial compensation. This approach aligns with broader antitrust allegations against Google, focusing on how its dominance in search allows it to control digital publishing as an “answer engine.”
The outcome of Chegg’s lawsuit could have significant implications for the industry, particularly regarding how AI-generated content is handled by dominant platforms like Google. If successful, the lawsuit could lead to:
• Reevaluation of Content Usage: A legal precedent that requires platforms to compensate content creators for using their material in AI-generated summaries.
• Antitrust Scrutiny: Increased examination of how monopolistic practices in the tech industry affect competition and content creators.
• Industry-Wide Changes: A shift in how AI-generated content is integrated into search engines, potentially leading to more equitable practices for content creators.
These developments could prompt other companies facing similar challenges to pursue legal action, leading to a broader reevaluation of AI’s role in content distribution and monetization.
As AI continues to reshape the digital landscape, it is crucial for businesses to ensure that their data is AI-ready and accessible across platforms where users seek information. Dappier offers solutions to help businesses syndicate their content effectively, ensuring that it reaches users through AI-driven platforms and traditional channels alike.
Users are increasingly relying on AI overviews and results for their information online. Ensure your data is AI-ready and syndicated wherever your users are with Dappier. Sign up to try Dappier today or schedule a demo at dappier.com/demo.