Google's business practices are increasingly under scrutiny as both South African authorities and U.S. firms like Chegg raise alarms about the tech giant's influence on media and education.
Recently, the Competition Commission of South Africa concluded its 18-month investigation, recommending Google pay up to R500 million annually for up to five years to help level the playing field for local media. This measure has garnered support from South Africa’s Parliament, which sees it as beneficial for the public broadcaster, the SABC, and the country’s media ecosystem overall.
Meanwhile, Chegg—a U.S. online education company—has filed a lawsuit against Google, accusing it of eroding demand for original content through its AI-generated overviews. According to Chegg, these features are harming publishers' abilities to compete fairly. They argue Google is co-opting publishers’ work to keep users on its site, which effectively cuts off financial incentives for creating original material.
“Our lawsuit is about more than Chegg - it’s about the digital publishing industry, the future of internet search, and about students losing access to quality, step-by-step learning in favor of low-quality, unverified AI summaries,” said Chegg's CEO Nathan Schultz. He highlighted the erosion of what he called the information ecosystem, warning it could become “hollowed-out and unworthy of trust.”
Chegg’s struggle has been emblematic of wider challenges faced by educational publishers and content creators. The company has seen its stock plummet over 98% since its peak price earlier this year, as they now contemplate potential sales or take-private transactions due to financial pressures heightened by Google's practices.
Google’s spokesperson Jose Castaneda dismissed Chegg’s claims as meritless, asserting, “With AI Overviews, people find Search more helpful and use it more, creating new opportunities for content to be discovered.” He emphasized the volume of traffic Google directs to websites across the internet, indicating this traffic benefit should counterbalance the alleged drawbacks of Google’s AI features.
Chegg’s lawsuit is notable as it appears to be the first case explicitly arguing against Google's AI practices under antitrust law. The current scrutiny mirrors similar claims made by publishers involved in collective legal action against Google, reflecting the tech company’s controversial standing within the industry.
Legal experts are keeping close tabs on this developing lawsuit, particularly as it unpacks the intricacies of digital publishing and antitrust law. U.S. District Judge Amit Mehta, who previously ruled against Google by affirming the company's illegal monopoly status, will oversee the case involving Chegg as well as the collective claims made by different publishers.
Around the globe, discussions fueled by the South African investigation resonate deeply. Authorities have pointed out the imbalanced power dynamic between tech giants and local media, which have been struggling financially and are increasingly reliant on ad revenues from big players like Google. The Competition Commission’s proposed remedy aims not only to provide financial assistance but also to push back against monopolistic trends impacting journalism.
The backdrop of both the South African recommendations and Chegg's lawsuit makes it abundantly clear: Google's dominant position has severe ramifications for not just media outlets but for the educational sector as well. Stakeholders across these industries are now advocating for systemic changes to reclaim fair compensation for their contributions.
The outcomes of these simultaneous battles may set significant precedents, with the potential to reshape the relationship between tech giants and content creators for the long term. Advocates stress the urgency of correcting the imbalance as society increasingly navigates the complex intersection of technology and information dissemination.
Whether these efforts will result in meaningful reforms or simply more entrenched divides remains to be seen, but one thing is certain: the conversation surrounding Google's business practices has only just begun.