Online study platform Chegg has filed a lawsuit against Google and its parent company Alphabet over unfair competition caused by Google AI Overviews products.
Chegg is also seeking “strategic alternatives” that CEO Nathan Schultz said they wouldn't need if Google hadn’t launched AI Overviews.
“Traffic is being blocked from ever coming to Chegg because of Google’s AIO and their use of Chegg’s content to keep visitors on their own platform,” he said.
Chegg is currently one of the worst-performing stocks in the Russell 3000 Index since its shares fell 18% in after-hours trading following the announcement.
The stock also lost 95% of its value since OpenAI revealed its ChatGPT tool in 2022.
Schultz says Google AI Overviews had a clear impact on Chegg at the start of the year.
“Our non-subscriber traffic plummeted to negative 49% in January 2025, down significantly from the modest 8% decline we reported in 2Q 2024,” he said.
In the lawsuit Chegg claimed Google’s conduct “threatens to leave the public with an increasingly unrecognizable internet experience, in which users never leave Google’s walled garden and receive only synthetic, error-ridden answers in response to their queries — a once robust but now hollowed-out information ecosystem of little use and unworthy of trust."
Many governments and businesses, like Yelp, have already investigated and sent lawsuits Google’s way for an alleged search monopoly.
Chegg filed its lawsuit in Washington DC, where a federal judge last year ruled that Google has monopolised the online search market.
