A Supreme Court Case Puts Google's $168 billion in Ad Revenue at Risk.

The US Supreme Court is set to hear a case that might threaten the most valuable industry on the Internet: Internet advertising.

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Gonzalez v. Google will be contested on Tuesday, focusing on whether internet corporations are accountable for the information their algorithms propose to users. The IT sector asserts that it is shielded under Section 230 of the communications statute.

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Most of the discussion around the case has been on the consequences to web corporations if the court rules that they are legally liable for the hundreds of millions of comments, videos, and other information uploaded daily by users. Nonetheless, such a judgment might threaten the automated advertising from which Facebook and Google get the majority of their revenue.

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In reality, social media corporations consider the case a danger to their existence.

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"This lawsuit might have a negative effect on the entire advertising ecosystem," said Marc Beckman, CEO of DMA United, an advertising agency that utilizes Google and Facebook's capabilities to offer tailored advertisements to potential clients worldwide.

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Google is being sued by the family of Nohemi Gonzalez, a 23-year-old American citizen who was one of at least 130 individuals killed by the Islamic State in coordinated assaults in Paris in November 2015. The family claims that YouTube should be held accountable for recommending Islamic State content automatically.

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Websites and ad networks automatically target advertisements based on information gathered about users, such as their location, browsing history, and topics they follow closely. Online tools publish advertisements on websites without human intervention.

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Google refused to comment on the matter. Yet, in its brief to the Supreme Court, it expressed worry about the case's impact on the economy, especially advertising. A spokeswoman for Meta stated that the company thinks Section 230 shields it from responsibility for any third-party material, including advertisements, and is concerned that the court might diminish these safeguards.

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According to analysts, a wide judgment by the Supreme Court might completely eliminate the business of presenting tailored advertisements on the Internet and revert online advertising practices to the early 1990s. It might also require platforms to battle a surge of lawsuits over the millions of ads they aim at consumers, resulting in exponentially increasing legal expenses for smaller ad networks and exchanges.

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"If we don't tailor advertisements, we'll return to the '90s paradigm of see who bites,'" said Jess Miers, legal advocacy counsel for the tech-funded organization Chamber of Progress. Miers formerly worked at Google.

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Google and Facebook account for about half of all digital advertising sales worldwide. The companies, which have been referred to as the "duopoly" of internet advertising, gather reams of data on their customers to give them appropriate advertisements. This business generates billions of dollars annually for both companies. According to data analytics company Inside Intelligence, Google's global advertising revenue in 2022 was $168 billion, while Meta's was $112 billion. Google's US revenue alone is estimated to reach $73.8 billion this year, while Meta's is projected to reach $51 billion. A judgment by the supreme court would only apply to the United States. However, it would be technically challenging for firms to manage advertising in their largest market differently than in other nations.

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The companies are already facing legal problems with their advertisements, particularly those relating to sensitive topics such as healthcare, politics, and employment. Thanks to Section 230, Facebook and Google won the dismissal of the vast majority of claims that would hold them liable, with rare exceptions.

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This might rapidly alter if the Supreme Court decides to restrict Section 230. Cathy Gellis, a California attorney who has defended internet businesses in online speech issues, said advertisements might be classified as "user-generated material" if the Supreme Court's decision is broad.

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Governments throughout the world are already cracking down on the digital advertising business, alleging that corporations collect too much information about individuals without their consent and breach their privacy. Beckman stated that privacy restrictions in nations such as the European Union that limit the amount of user data corporations are permitted to gather have already placed a tremendous burden on the digital advertising ecosystem.

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Beckman stated, "As an agency, we are already creating new marketing approaches to battle not only what we believe would occur if 230 is curtailed, but also these additional third-party data privacy regulations." He added that advertisers would no longer be able to rely on the hyper-personalized and low-cost ad networks they've grown accustomed to, signaling the return of "beautiful" and different advertising. Targeted advertising enables businesses to reach their intended audiences with minimal effort, but a shift away from algorithmic suggestions may force advertisers to make greater efforts to attract attention.

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Miers stated that Google and Facebook would likely face the majority of cases if Section 230 is weakened by the court. Yet, smaller advertising firms and networks will have "trickle-down" impacts.

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Internet advertising is so essential to the economic models of Meta and Google that it is probable they will try to settle the dispute in court, according to California attorney Gellis. They would attempt to cover legal fees and win cases based on their merits. "Everyone will attempt to navigate the situation as best they can," Gellis added.

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According to some opponents of tech corporations, a reduction in targeted advertising on the Internet might assist the most vulnerable internet users. Common Sense Media and Facebook whistleblower Frances Haugen stated in a Supreme Court brief that Google's video and ad suggestions could create a "feedback loop" that directs children and adolescents down rabbit holes that might involve eating disorders, self-harm, and extremism. According to them, Google and Facebook should exert greater control over their advertisements to youthful audiences.

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Eric Goldman, a law professor at Santa Clara University School, stated that the case might "shock a number of corporations."

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"So much advertising is now given in a dynamic manner," added Goldman. "If this dynamic evaluation is an algorithmic suggestion that disqualifies the ad network for 230 protections, the advertising industry must take a new approach."

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