Chegg Sues Google Over AI Summaries

On Monday, the “education technology” company Chegg filed a lawsuit against Google claiming that Google is breaching antitrust laws with its AI summary feature.

According to the lawsuit, Google is using its monopoly position on search to scrape content from various sites and present the information in AI summaries on Google result pages.

A spokesperson for Chegg said that this lawsuit is about more than Chegg. He said it was “about the entire publishing industry” and “the future of internet search.”

A spokesperson for Google said that the claims are meritless.

Though the lawsuit is the latest in a long line of lawsuits filed against AI companies, it still stands out. Not only is it an antitrust case, not a copyright one, but neither party will receive much sympathy – especially from Academia.

That’s because Chegg is one of the most hated education companies. Furthermore, given its recent history, the company’s complaints about AI are nothing short of ironic.

There Ain’t No Heroes Here

On the surface, Chegg might seem like a sympathetic company. Once valued at over $12 billion with a share price above $116, the company’s revenue has fallen by over 75%. Now, the company is valued at just $110 million, and the stock price is trading at or below a dollar.

Though many factors have contributed to Chegg’s decline, AI has definitely been one of the more pressing issues. To make matters worse, it’s an issue that is growing. According to a report in the New York Post, the company’s non-subscriber traffic fell by 49% in January compared to the previous month.

According to Chegg, Google’s AI summaries have been particularly harmful. The company accuses Google of taking content on Chegg to generate those summaries, eliminating the need for students to visit the site or pay for a subscription.

However, that sympathy melts when one realizes that Chegg is guilty of many of the same things, and often more.

In academia, the term “Chegg” has become synonymous with cheating. It’s a “homework help” site best known for giving students answers to exam questions, access to contract cheating services and more.

Chegg built much of its content library on tests and other materials created by instructors, which raises ethical and copyright issues. In September 2021, textbook publisher Pearson Education filed a lawsuit against Chegg partly for these reasons.

In short, much of the content Chegg is accusing Google of “stealing” was not created by Chegg or its users.

To make matters worse, Chegg is also being disingenuous about AI. Chegg uses Meta’s open-source Llama model to provide users with answers. Chegg has also partnered with OpenAI to provide additional tools.

Many of the answers that its AI systems provide come from third-party websites. In short, Chegg is doing the same thing to other sites that it accuses Google of doing to them.

The hypocrisy knows no bounds.

Circling the Drain

The lawsuit is, at best, a longshot. It’s a hail mary play to try to save the company whose fortunes have come crashing down in recent years.

To be clear, it wasn’t always like this. Though Chegg’s roots date back to 2000, the company was incorporated in 2005. In the 2010s, Chegg made several acquisitions in the homework help, class notes and tutoring space. This began to draw the ire of instructors, who increasingly saw the site used for cheating.

However, the pandemic saw Chegg explode into the public consciousness. Remote learning created a massive spike of interest in Chegg, seeing their membership and revenue numbers soar. But the one-two punch of the pandemic ending and the rise of generative AI caused the bottom to fall out.

Chegg has taken several steps to right the ship. This included launching Chegg Skills to provide direct learning, Check Perks to incentivize subscriptions, and more. However, none of those efforts have moved the needle.

Now Chegg has filed this lawsuit. Though I’m not an expert on antitrust law, the odds do not look good for Chegg. The market shares that outlook. When Chegg announced the lawsuit, its stock dropped 20%, reaching new lows.

If Chegg could have filed a copyright infringement lawsuit, they might have better odds. However, they don’t own the rights to most of the content on their site. Even if they did, it might set a precedent for others to sue them.

Chegg is backed into a corner. And this isn’t likely to offer a way out.

Bottom Line

As I said in June 2024, as bad as AI has been for academic integrity, it’s been even worse for the contract cheating business.

When students decide to cheat, they typically follow the path of least resistance. Why pay a stranger online to write an essay for you when a free AI can generate one? Why subscribe to Chegg to get niche answers when AIs can provide those instantly?

While AI hasn’t given instructors many reasons to cheer, watching the contract cheating companies struggle has been a bright spot.

To be clear, contract cheating isn’t going anywhere. Chegg still earned more than $140 million in revenue last year and it’s still very easy to find essay mills and similar services online. Just like essay mills didn’t surplant copy/paste plagiarism, AI won’t surplant contract cheating.

Still, if Chegg’s plight is anything to go by, it has seriously hurt it. So, as academia tries to find its approach to AI, maybe it can worry a little less about Chegg and the sites like it.

But that shouldn’t stop us from enjoying the schadenfreude of Chegg suing Google over Google’s use of content Chegg doesn’t own to generate the product that’s replacing it. The irony is almost beautiful.