American education technology company Chegg has been fined $500,000 after the Federal Court of Australia found it had broken local law by helping university students cheat on assessments.

It’s the first time that a company has been found to have breached new academic cheating laws, which passed in 2020.

The federal government’s Tertiary Education Quality and Standards Agency (TEQSA) launched legal proceedings against Chegg – a company publicly listed on the New York Stock Exchange – in October 2024.

The lawsuit related to the company’s Expert Q&A service, which involved paying subscribers submitting questions and Chegg then engaging third-party experts to provide handwritten answers to them.

These answers were then posted online and could be accessed by the asker and any other paying subscribers.

In 2022, Chegg had nearly 120,000 users in Australia, and charged a monthly subscription fee of up to $28.55.

The company billed itself as a “student-first connected learning platform” with a mission to “help every student achieve their best, in school and beyond”.

Court calls for academic integrity

The Federal Court ruled in late March that Chegg had breached Australian law by providing or arranging for a third party to provide an academic cheating service to students studying at Monash University in late 2021 and early 2022.

“Academic integrity is fundamental to the quality and reputation of Australia’s higher education sector and the academic success and experiences of students,” TEQSA CEO Dr Mary Russell said in a statement.

“This outcome reinforces the importance of academic integrity to Australian higher education.

“TEQSA will act decisively to address allegations of academic cheating services being provided or offered to Australian higher education students.”

After the proceedings were brought forward, Chegg admitted to three contraventions of Australian law.

On each of the three occasions, a student at Monash uploaded part or all of an assessment and Chegg then facilitated an expert to provide a handwritten or typed answer to it.

This answer was then used by three students and submitted as part of the assessment, with Monash University later detecting the plagiarism.

In one case a student submitted an answer to an assessment that even included “identical errors” to the one provided by the Chegg expert.

The Federal Court found Chegg had contravened Australian law by providing this service to the Australian university students and not adequately implementing policies and procedures designed to stop academic cheating.

Chegg has been fined $500,000 and ordered to pay costs of $150,000 as part of the judgement.

The maximum penalty possible for the three contraventions was $1.665 million, with Chegg ultimately fined less than a third of this.

The company was contacted for comment.

The rise of AI-assisted cheating

Chegg’s business has declined in recent years with the advent of generative AI tools to assist with university work and assessments.

In 2022 the company had 8.1 million subscribers, but this figure had dropped to 2.87 million by 2025.

Chegg generated revenue in Australia of $12 million ($US8.8 million) in the 2022 financial year, and this fell to $3 million ($US2.2 million) in the 2025 financial year.

The Federal Court said the company now had just over 33,000 users in Australia.

Chegg announced a major restructure in October 2025, with 45 per cent of its workforce cut amid a pivot towards the “skilling market”.

“The new realities of AI and reduced traffic from Google to content publishers have led to a significant decline in Chegg’s traffic and revenue,” the company said in a statement last year.

Chegg’s market capitalisation has fallen by more than 90 per cent in the last five years, and now sits at about $151 million ($US108 million).