Online education provider Chegg, Inc. has launched a high-stakes federal antitrust lawsuit against Google LLC and its parent Alphabet Inc., marking what is believed to be the first time a single company has targeted Google’s AI Overviews feature under antitrust law.
Chegg’s Claims: Traffic, Revenue, and ‘Answer Engine’ Concerns
Chegg asserts that Google’s AI-generated summaries, presented as AI Overviews at the top of search results—have dramatically reduced user visits to its platform. The company claims this shift directly impaired site traffic and revenue, contributing to a year-over-year net revenue drop of around 24% in Q4, and a staggering 49% decline in non-subscriber traffic in January.
Chegg CEO Nathan Schultz stated that Google’s transformation “from a search engine into an answer engine” undermines content creators by enabling AI to deliver answers directly, eliminating user visits and the ad-driven traffic that publishers rely on.
Central Legal Arguments
Chegg bases its lawsuit on three key antitrust claims:
- Reciprocal Dealing: Publishers must supply Google proprietary content to be included in search results—a coercive arrangement.
- Monopoly Maintenance: Google allegedly uses its dominant search position to misappropriate content and push users away from third-party sites.
- Unjust Enrichment: Google profits from Chegg’s content without compensating the provider.
The suit invokes the Sherman Antitrust Act, arguing that Google’s actions undermine the traditional “search bargain”—where publishers allowed crawling in exchange for traffic, a social contract that AI Overviews have disrupted.
Google’s Response
In defense, Google dismissed the allegations as “meritless,” contending that AI Overviews not only make Search more helpful, but also promote a wider diversity of sources and drive additional traffic to content creators.
A Legal Landscape Already Hostile to Google
This lawsuit lands amid an increasingly aggressive regulatory gaze on Google:
- In August 2024, Judge Amit Mehta deemed Google to hold an illegal monopoly in online search, opening a pathway for remedies ranging from structural changes to default agreements.
- More recently, in April 2025, a separate DOJ case also found Google illegally monopolized the adtech market.
Chegg’s case may expand this scrutiny into the realm of content aggregation and AI, potentially influencing how courts view the monetization of third-party material by dominant platforms.
Industry and Financial Repercussions
- Chegg’s valuation and layoffs: Once valued near $2 billion, the company’s market cap has plummeted to roughly $110 million, prompting workforce reductions of over 20% and the contemplation of going private or exploring acquisition options.
- Broader publisher alarm: News organizations and digital publishers have previously warned that AI Overviews could have “catastrophic” effects on web traffic and digital content diversity.
- Precedential weight: Legal experts see Chegg’s lawsuit as a potential inflection point—one that could force platforms to renegotiate how AI systems source, credit, and compensate for content.
What’s Next?
- The lawsuit has been assigned to Judge Amit Mehta, increasing the odds that the case could intersect with broader antitrust remedies under his purview.
- Outcomes may redefine publisher-platform dynamics, influence AI regulation in search, and potentially reshape digital content monetization practices.
Chegg’s bold legal move taps into growing concerns about the sustainability of a content ecosystem dominated by AI-powered “answer engines.” The case’s outcome may not only determine Chegg’s fate—but could signal how the justice system will balance innovation with the protection of content creators.
