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<\/div>\nThe social media companies view the case as an existential threat. (Representational)<\/p>\n<\/div>\n
Washington: <\/b><\/p>\n
The US Supreme Court is\u00a0poised to hear a case that could spell danger for the internet’s most lucrative business: online advertising.\u00a0<\/p>\n
The case, Gonzalez v. Google, will be argued Tuesday and centers on whether internet companies are liable for the content their algorithms recommend to\u00a0users. The tech industry says it’s\u00a0protected by a legal shield contained in communications law known as Section 230.<\/p>\n
Much of the\u00a0discussion surrounding the case has focused on the costs to online companies if the court determines they are legally responsible for the hundreds of millions of\u00a0comments, videos and other content posted by users every day.\u00a0However, such a decision could also strike at the heart of the automated advertising upon which Meta Platforms Inc.’s Facebook and\u00a0Alphabet Inc.’s Google\u00a0rely for the bulk of their revenue.<\/p>\n
In fact, the social media companies\u00a0view the case as an existential threat.\u00a0<\/p>\n
\u201cThis case could adversely impact the entire advertising ecosystem,\u201d said Marc Beckman, Chief Executive Officer of DMA United, an advertising firm that regularly uses Google and Facebook’s tools to serve targeted ads to potential customers around the world.\u00a0<\/p>\n
Google is being sued by the family of Nohemi Gonzalez, a 23-year-old US citizen who was among\u00a0at least 130\u00a0people killed in coordinated attacks by the Islamic State in Paris in November 2015. The family argues that Google’s YouTube should be held responsible for automated recommendations of\u00a0Islamic State videos.<\/p>\n
Websites and ad networks automatically target ads based on\u00a0information they have collected about users, including their location, browsing history, topics they follow closely and more. The ads are posted to websites by online tools without human intervention.<\/p>\n
Google declined to comment about the case. But\u00a0in its Supreme Court brief, it\u00a0said it is\u00a0concerned about the case’s impact on the economy, including advertisers. Meta believes that Section 230 shields the company from liability for all content from third parties, including ads, and the social media giant is worried\u00a0that the court could weaken those protections, a Meta spokesperson confirmed.<\/p>\n
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<\/div>\n<\/div>\nA broad ruling by the Supreme Court could effectively snuff out the business of serving personalized ads on the internet and turn online ad practices back to the early 90s, experts say. It could also force the platforms\u00a0to litigate a wave of lawsuits over the millions of advertisements they target at users,\u00a0resulting in exponential legal costs for smaller ad networks and exchanges.<\/p>\n
\u201cIf we’re not targeting ads, we’re going back to the old ’90s model of \u2018see who bites,’\u201d said Jess Miers, legal advocacy counsel with tech-funded group Chamber of Progress. Miers previously worked for Google.\u00a0<\/p>\n
Together, Google and Facebook capture almost 50% of all digital advertising revenues worldwide. The companies, which have been referred to as the \u201cduopoly\u201d of online advertising, collect reams of data about their users in order to serve them relevant ads \u2013 a business that mints both companies billions of dollars per year. Globally, Google made $168 billion in ad revenue in 2022 while Meta made $112 billion,\u00a0according to data analytics company Insider Intelligence. This year, Google’s US revenue alone is projected to reach\u00a0$73.8 billion, while Meta’s\u00a0is expected to reach\u00a0$51 billion. A ruling by the high court would only apply to the US, but it would be technically difficult for the companies to handle advertising differently in its largest market\u00a0than other countries around the world.<\/p>\n
The companies are already facing legal challenges over the ads they serve, particularly those that relate to sensitive issues like healthcare, politics, employment opportunities and more. With few exceptions, Facebook and Google successfully win dismissals of most cases that would hold them responsible, thanks to Section 230.<\/p>\n
That could change quickly if the Supreme Court decides to narrow\u00a0Section 230. While the shield protects companies from lawsuits over content generated by ordinary people, Cathy Gellis, a California lawyer who has represented tech companies in online speech cases, said ads could be categorized as \u201cuser-generated content\u201d if the Supreme Court’s ruling is wide-ranging.\u00a0<\/p>\n
The digital advertising industry is already coming under fire as governments around the world crack down, arguing that companies collect too much information about people without their consent and violate their privacy. Privacy regulations in countries including the European Union limiting the amount of data companies are allowed to collect on users have already put a huge strain on the digital ads ecosystem, said Beckman.\u00a0<\/p>\n
\u201cWe are already, as an agency, implementing new marketing initiatives to not just combat what we think will happen if 230 is limited, but also in the face of these new third party data privacy restrictions,\u201d Beckman said. He said the era of \u201cbeautiful\u201d and distinctive advertising may be on its way back as advertisers can no longer rely on the hyper-personalized and cheap ad networks they’ve become accustomed to. While targeted advertising allowed firms to reach their intended audiences with little effort, a pivot away from algorithmic recommendations could require advertisers to work harder to grab attention.\u00a0<\/p>\n
Miers said it’s likely that Google and Facebook will face the brunt of lawsuits the court weakens Section 230. But smaller\u00a0ad agencies and ad networks will face \u201ctrickle-down\u201d effects.\u00a0<\/p>\n
Online advertising is so key to Meta and Google’s business models, it’s likely they would try to fight it out in court, said Gellis, the California lawyer. They would try to handle the legal costs and see if they could win cases on the merits. \u201cEverybody’s going to try to muddle through as best they can,\u201d Gellis said.\u00a0<\/p>\n
To some critics of the tech companies, a wind down of targeting advertising on the internet could benefit some of the internet’s most vulnerable users. Children’s advocacy group Common Sense Media and Facebook whistleblower Frances Haugen in a Supreme Court brief argued that Google’s video and ad recommendations can create a \u201cfeedback loop\u201d that steers children and teenagers down rabbit holes that can revolve around eating disorders, self harm and extremism. In their view, Google and Facebook should better control the ads that it serves to young audiences.\u00a0<\/p>\n
The case could be a \u201cshock to a lot of businesses,\u201d said Eric Goldman, a law professor at Santa Clara University School.\u00a0<\/p>\n
\u201cSo much of advertising is now being delivered in a dynamic way,\u201d Goldman said. \u201cIf that dynamic assessment is an algorithmic recommendation that disqualifies the ad network for 230 protections, then the ad industry has to do something different.\u201d\u00a0<\/p>\n
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)<\/i><\/p>\n
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