German media regulators ruled that Google's AI Overviews constitute Google's own content (not neutral search results) and crowd out organic links.

Germany's Commission for Licensing and Supervision (ZAK) has issued its first rulings against AI services from Google and Perplexity, marking the first time German regulators have applied the country's State Media Treaty to AI search engines and chatbots.

"AI search engines and chatbots are content providers, and we are now consistently applying German media law to them," said ZAK Chairman Dr. Thorsten Schmiege. The regulator contends that the liability shield under the Digital Services Act—which protects platforms distributing third-party content—does not apply to AI-generated responses because they constitute the providers' own content. A Munich court recently reached a similar conclusion, treating AI-generated text as independent content containing "independent, new, and substantive statements" produced by analyzing and combining material from various third-party sites. Google was held liable for false claims and says it will appeal.

The rulings formally find that both companies violated Section 109 of the State Media Treaty and are immediately enforceable. Google and Perplexity each have one month to appeal.

Regulators accuse Google of failing to meet transparency rules and violating nondiscrimination requirements. Google's AI summaries receive prime placement above traditional search results, pushing down links to journalistic sources. Regulators characterize this as prohibited discrimination because the AI responses are Google's own content, not neutral search results. While Google argues that existing studies are flawed, the company has not released alternative data demonstrating that users click source links more readily when placed higher.

In Perplexity's case, regulators have flagged only the company's lack of a designated representative in Germany and missing transparency disclosures. The same concerns would theoretically apply to Perplexity given that its services function similarly, though Google's reach is substantially greater.

Regulators also view AI services as media intermediaries. When a chatbot includes third-party content as sources or in link lists, it shapes user access to that content, meeting the regulatory bar for a media intermediary and triggering transparency rules designed to protect media diversity. "Anyone who controls whether content gets found through the selection and placement of links must make that transparent," Schmiege said. "Otherwise, diversity among journalistic and editorial outlets will disappear."

A legal opinion by Professors Jan Oster and Christoph Busch supports the regulators' reasoning. Adding AI to search engines fundamentally changes how people discover information. Instead of a list of linked results, users receive a single prose answer. This redirects traffic away from original sources and threatens journalism's economic model. The authors recommend creating a separate regulatory category for AI search engines under state media law, with specific rules to protect media diversity.

Google has begun preparing defenses, including rolling out a "Preferred Sources" feature that allows users to choose which sources appear in AI responses. In practice, this approach offers Google considerable latitude: few users are likely to maintain custom source lists, even as publishers promote the feature. For Google, the mechanism amounts to cover for replacing original sources in AI responses with providers unlikely or unable to challenge the company in court.