A federal court tossed out two lawsuits filed by digital publishers alleging that Google's move to embrace artificial intelligence had broken the "fundamental bargain" of the internet and resulted in lost revenue.
The suits were brought independently by education site Chegg and Penske Media, the publisher of Rolling Stone and Variety, in 2025. A U.S. District Court for the District of Columbia granted Google's motions to dismiss both of them in a combined ruling on Wednesday.
Shares of Google parent Alphabet were down 1.4% on Thursday. Chegg dropped 4.3%, compounding the misery for a stock that has fallen more than 99% since its all-time closing high in February 2021.
Google, Chegg, and Penske didn't immediately respond to Barron's requests for comment.
Chegg and Penske argued that Google had a "quid pro quo" with internet companies: The search giant would parse publishers' sites for relevant material and deliver search referrals in return. Google unilaterally changed this arrangement, first by introducing excerpts from sites and then through its generative AI products, the companies claimed.
Today, the AI Overviews that appear at the top of Google searches can paraphrase publishers' information, reducing the need to click through to websites.
Google, however, didn't have any specific transactional relationship with Chegg or Penske as a supplier, purchaser, or competitor, Judge Amit P. Mehta found.
"Plaintiffs have pleaded only that they have an 'expectation' that Google will send them search traffic if they make their content available for free," Mehta wrote. "But an expectation is not an agreement. It is simply how a general search engine works."
As Barron's has covered, AI-generated answers have indeed altered the internet search landscape, limiting users' need to click through to particular webpages. Wednesday's ruling indicates that this trend isn't something publishers can remedy through the courts. Google and other AI developers hold the upper hand when it comes to directing search traffic.
In a previous U.S. government antitrust case against Google, Mehta ruled that Google maintained a monopoly in general search services and general text advertising, but issued what financial markets saw as a limited set of responses. The rise of generative AI as a potential competitive threat to Google search "changed the course" of that case, Mehta said in his ruling last year.
The race to build chatbots and AI search tools is indeed competitive, but it isn't clear if publishers will benefit.
"The court does not treat Plaintiffs' alleged harms lightly," Mehta acknowledged. "Nor is it unsympathetic to the situation publishers now find themselves in, and the knock-on consequences to journalists, educators, and other online creators whose content Google takes and repurposes without compensation."
But antitrust litigation isn't meant to deal with changes wrought by technological innovation, the court added. The onus is instead on regulators or Congress to step in if they think AI search tools have too much power on the internet.
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