Friday, September 17, 2021

Pearson sues edtech rival Chegg for copyright infringement

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Pearson PLC update

Chegg, an educational technology company that has grown rapidly by selling answers to millions of questions about official US college courses, has been sued by publisher Pearson for copyright infringement.

Pearson filed a proceeding against Chegg on Tuesday, with a California-based company copying hundreds of thousands of questions from Pearson’s textbooks and selling them with answers as part of a $ 14.95 “homework help” subscription. Claimed to have infringed the rights “on a large scale”. Service for students.

The movement comes as Pearson Start a strategic shift Under the new CEO Andy Bird, the FTSE 100 Group has launched a subscription service that gives US students access to all 1,500 textbooks for $ 14.99 per month.

The move puts more direct competition with Chegg, which began as a textbook rental service in 2005, but now from a subscription service that provides students with answers to questions from millions of courses in the United States. It draws most of its revenue.

Demand for Chegg’s services increased during the pandemic, with subscribers up 67% last year and net sales up 57% to $ 644.3 million.

With 6.6 million users and a market capitalization of $ 11.1 billion, more than 177-year-old Pearson, Chegg has been criticized by educators who claim that the service allows for widespread fraud. I am.

The company’s website states that their products “never use”. .. .. For all kinds of fraud and fraud, “it is designed to support learning and is not a replacement for learning.”

Chegg’s subscription service includes a library of 21m solutions written by “experts” and end-of-chapter questions from textbooks primarily hosted by contractual agreements with educational publishers. I am.

Until recently, Chegg was allowed to publish material by Pearson, but after June 1, Pearson states that the publisher’s right to view content has expired.

In a proceeding filed in a New Jersey court, Pearson continued Chegg to “systematically” publish an answer set from thousands of textbooks, allowing students to “easily search and find answers to assigned textbook questions.” He accused him of copying the copyrighted material “so that he could.”

He argued that this could violate Pearson’s exclusive copyright, undermine educational progress, and encourage university instructors to reconsider the use of textbooks in their courses.

“Pearson and his authors spend a great deal of time, money and expertise developing the world’s best learning content, including questions at the end of the textbook chapter,” said Timbo, president of Pearson’s Higher Education Division. Gic says.

“We value that content with the people who create and use it, and that’s why Pearson is acting to protect and protect its assets.”

Chegg did not immediately respond to a request for comment on the Pearson proceedings.The statement on the “Code of Ethics” website is “Respect[s] It is the “intellectual property rights of others”, and the copyrighted material is deleted after submission from the copyright holder.

Citigroup analyst Tom Singlehurst said the proceedings were “amazing” given the previous contractual agreement between the two companies, but Pearson to push Netflix-style subscriptions to students. Said that it may be an attempt to strengthen the management of the content.

The company’s research subscription package provided a variety of answers along with those obtained from the textbooks, so it was not possible to estimate the potential economic impact of a successful proceeding on Chegg, but the proceeding was “with Chegg. I questioned the proceedings with others. Textbook publishers. ”

Chegg shares fell 0.7% to $ 76.6 in early New York trading. Pearson shares rose 1.1%.

Pearson sues edtech rival Chegg for copyright infringement Source link Pearson sues edtech rival Chegg for copyright infringement

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