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The educational technology company Chegg has filed a lawsuit against Google over the AI Overviews tool as it accused the company of having “unjustly retained traffic.”
The complaint was filed against Google LLC and Alphabet Inc. in the US District Court of Columbia. The EdTech brand went into detail about the matter during its fourth quarter and full-year financial results report.
Within this, the CEO Nathan Schultz spoke about two recent business decisions: “We are launching a strategic review process and filed a complaint against Google, which has unjustly retained traffic that has historically come to Chegg, impacting our acquisitions, revenue and employees.”
Google launched the AI Overview feature in May 2024 which appears during the search stage and includes quick answers hosted at the top of the page – ahead of links to other websites.
The two recent business decisions are connected, as Schultz continues within the prepared remarks by suggesting the company wouldn’t need to review strategic alternatives if this new search feature hadn’t been implemented.
“Unfortunately, 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,” the CEO says.
Chegg CEO explains concerns with Google in financial report
The complaint also alleges that Google AI Overviews has transformed Google from a ‘search engine’ into an ‘answer engine.’
“Google’s expansion of AIO forces traffic to remain on Google, eliminating the need to go to third-party content source sites. The impact on Chegg’s business is clear.
“Our non-subscriber traffic plummeted to negative 49% in January 2025, down significantly from the modest 8% decline we reported in Q2 2024.”
In October 2024, it was announced that AI Overviews would be expanded and rolled out in more than 100 countries and territories worldwide. During the blog post that shared the news, the company said “the feedback we’ve received for AI Overviews has been highly positive.”
Featured Image: AI-generated via Ideogram
