Google's RTB Privacy Settlement: A $21.6 billion gamble that could reshape digital advertising

The digital advertising landscape faces a seismic shift as Google agreed to settle a landmark privacy lawsuit that could fundamentally alter how personal data flows through the real-time bidding (RTB) ecosystem. According to court documents filed September 2, 2025, in the Northern District of California, the settlement establishes unprecedented user controls over data sharing in Google's RTB auctions while potentially threatening revenue streams that sustain open web publishers.

The Settlement: A New Era of User Control

The settlement in In re Google RTB Consumer Privacy Litigation introduces a new "RTB Control" that allows users to limit personal information shared during Google's real-time bidding auctions. According to the court filing, when activated, this control removes all user identifiers from RTB bid requests, including encrypted Google User IDs and device advertising IDs, effectively preventing targeted advertising based on personal data.

"The RTB Control will make it very difficult for Google RTB auction participants to identify and/or track any class member who enables the RTB Control, and results in those class members no longer being tracked or targeted in RTB system for personalized ads," according to plaintiffs' counsel in their motion for final approval.

The technical implementation removes IP addresses from bid requests, prevents cookie matching, and generalizes user agent data to the major version level. These changes effectively strip away the data points that make RTB auctions valuable to advertisers seeking precise targeting capabilities.

Financial Impact: Up to $21.6 Billion in Value

Plaintiffs' damages expert Professor Robert Zeithammer estimates the settlement's value between $1.4 billion and $21.6 billion over the three-year injunction period. The wide range reflects different adoption scenarios, with the maximum value assuming widespread user adoption of the new privacy controls.

According to the settlement analysis, even conservative estimates placing adoption at 8.8% of the class would yield $1.4 billion in value. The class encompasses "all individual account holders subject to a U.S. Terms of Service who have an active Google account," estimated between 169 million and over 200 million users.

Google will implement these changes by February 13, 2026, or within 30 days of final court approval, whichever comes later. The company must maintain the RTB Control and associated disclosures for three years after implementation.

The Decline of Open Web Display Advertising

The settlement emerges against a backdrop of declining open web display advertising, which Google characterized in its September 5, 2025 antitrust filing as "already in rapid decline." Internal Google data cited in that filing revealed that only 11 percent of display advertising impressions purchased by AdWords advertisers were for open-web display in January 2025, down from over 40 percent in January 2019.

This dramatic decline reflects fundamental shifts in digital advertising consumption patterns. Connected TV advertising has emerged as what industry sources describe as "the fastest-growing advertising channel in the U.S." Major streaming providers including Netflix and Disney have redirected substantial investments toward television advertising infrastructure.

Retail media advertising represents another rapidly growing sector diverting spending from traditional open web publishers. According to Google's filing, retailers have made enormous investments in advertising capabilities, with $60 billion expected to be spent in retail media during 2025.

Threats to Publisher Revenue Streams

The RTB settlement directly impacts revenue streams that sustain open web publishers, particularly those dependent on programmatic advertising through Google's systems. When users activate the RTB Control, the data that makes their impressions valuable to advertisers disappears, potentially reducing bid prices and overall revenue.

According to PPC Land's previous analysis, smaller publishers remain particularly dependent on open web display revenue streams and lack resources to diversify into emerging advertising formats. The platform has documented how independent advertising technology companies struggled to compete as market forces shifted toward integrated platforms and alternative inventory sources.

Google's RTB system processes billions of daily auctions across approximately 1.3 million publishers, according to expert testimony cited in the litigation. Professor Christo Wilson's research identified this scope by analyzing Google's sellers.json data, revealing that only 13.31 percent of these publishers were publicly disclosed, with the remainder marked as anonymous.

The settlement creates what Google describes as "perverse incentives" that could accelerate open web decline. According to their antitrust filing, forcing changes to RTB while allowing continued operation of advertising tools for other formats would "incentivize Google to shift the resources it invests in serving open-web publishers to serving publishers who prioritize other formats, like app and CTV."

How Small Publishers Get Squeezed

Small publishers face multiple pressures from the RTB settlement's implementation. First, reduced data availability makes their inventory less attractive to advertisers seeking precise targeting, potentially driving down prices through decreased demand. Second, the shift toward alternative advertising formats favors larger publishers with resources to adapt their technology infrastructure.

Traditional media companies that have not successfully diversified beyond open web display advertising remain particularly vulnerable. According to the court's liability opinion referenced in Google's antitrust filing, open web display advertising revenue remains "essential" for businesses including "news, media, and other online publishers' businesses," specifically citing companies "such as The New York Times or The Wall Street Journal."

The technical complexity of implementing privacy-compliant advertising systems creates additional barriers for smaller publishers. Unlike major platforms with dedicated engineering teams, independent publishers often rely on third-party solutions that may not adapt quickly to new privacy requirements.

RTB Data and the Privacy Battleground

The litigation revealed the extensive scope of personal data sharing through Google's RTB system. According to court documents, RTB bid requests include Google IDs for each account holder, IP addresses, cookie-matching services, user-agent information, publisher IDs, URL content, unique device identifiers, and "vertical" interests relating to race, religion, health, and sexual orientation.

Google's internal documentation categorizes users into over 5,000 consumer segments and subcategories. These include health verticals such as AIDS & HIV, Depression, and Drug & Alcohol Treatment; religion segments including Buddhism, Christianity, Hinduism, Islam, and Judaism; and identity categories encompassing African-Americans, Jewish Culture, and LGBT.

Professor Wilson's analysis of RTB data found that 52 different companies "observe at least 91 percent of an average user's browsing history under reasonable assumptions about information sharing within RTB auctions," while 636 companies "observe at least 50 percent of an average user's impressions."

The Antitrust Intersection

The RTB settlement intersects with ongoing antitrust proceedings against Google's advertising technology business. The Department of Justice seeks structural remedies including potential divestiture of Google's ad exchange and publisher ad server platforms, arguing these tools facilitate monopolistic practices that harm publishers.

Google contends that structural remedies would accelerate declining open web display advertising markets already facing disruption from AI and Connected TV growth. According to their behavioral remedy proposal, divestiture would create "unprecedented technological project of ripping 'AdX' and 'DFP' out of Google's core infrastructure" that has supported these products for over a decade.

The timing creates particular challenges for publishers caught between privacy requirements and antitrust enforcement. While the RTB settlement addresses privacy concerns through user controls, the parallel antitrust case targets the technological infrastructure that enables efficient ad serving to publishers.

AI and Market Transformation

Artificial intelligence continues reshaping advertising technology at what Google witnesses characterized as "weekly" intervals. Meta has launched AI tools with stated aims of "fully automating ad creation using AI," while sell-side providers like Index Exchange have integrated generative AI to power advertising curation capabilities.

These technological shifts create new competitive pressures for traditional publishers relying on human-managed advertising operations. AI-powered advertising tools programmed to maximize performance would likely accelerate spending shifts toward non-open web display formats that offer superior return on investment.

The emergence of AI-powered publishers like Perplexity, which have begun monetizing through advertising, creates entirely new publisher categories that compete directly with traditional web publishers for advertiser attention and spending.

Global Regulatory Pressure

The RTB settlement reflects broader global regulatory pressure on data sharing practices in digital advertising. The Irish Data Protection Commission opened investigations into Google RTB in May 2019 following complaints about personal information disclosure. The U.K.'s Information Commissioner's Office has similarly investigated privacy risks associated with RTB exchanges.

European regulators reached different conclusions about the viability of behavioral remedies in digital advertising markets. According to Google's antitrust filing, the European Commission determined that "each time a practice was detected by the industry, Google subtly modified its behavior so as to make it more difficult to detect, but with the same objectives, with the same effects."

Belgium's Data Protection Commission identified RTB's collection of personal data without user consent as a core problem, taking issue with the collection of "sensitive category" data about users including race, sexuality, health status, and political leaning without their consent.

Technical Implementation Challenges

The RTB Control's technical implementation creates significant challenges for the advertising ecosystem. When activated, the control removes the data points that enable precise targeting, potentially reducing the value of impressions to advertisers who rely on audience data for campaign optimization.

Google's transition to OpenRTB protocol, completed February 15, 2025, provides the technical foundation for implementing these privacy controls across industry-standard interfaces. However, the removal of targeting data fundamentally alters the value proposition of programmatic advertising for many advertisers.

The settlement includes provisions for future modifications to the RTB Control's functionality for compliance purposes, acknowledging the fast-changing regulatory landscape. This flexibility allows Google to adapt the control as privacy laws evolve, but creates uncertainty for publishers planning long-term revenue strategies.

Connected TV and Retail Media Growth

The growth of Connected TV and retail media advertising creates alternative inventory sources that compete directly with traditional web publishers. Netflix launched an in-house advertising suite with Magnite partnership support, while Disney expanded streaming advertising capabilities across multiple platforms.

Amazon invested heavily in demand-side platform partnerships with TV providers specifically "to clobber rivals The Trade Desk and Google in a key area of advertising." These investments in premium video inventory offer advertisers alternatives to web display advertising that may not be affected by RTB privacy controls.

Retail media's $60 billion expected spending in 2025 represents advertiser budget that previously supported open web display advertising. Amazon's advertising division focused investments on streaming television partnerships rather than traditional web display inventory, signaling the industry's strategic direction.

Publisher Adaptation Strategies

Publishers facing RTB settlement impacts require strategic adaptation to maintain revenue sustainability. Successful strategies include diversification into emerging advertising formats, development of first-party data capabilities, and investment in direct advertiser relationships that reduce dependence on programmatic auctions.

Contextual advertising emerges as a viable alternative to behavioral targeting, analyzing webpage content rather than personal data to ensure relevant ad placement. This approach maintains advertiser relevance while complying with privacy requirements, though it may generate lower revenues than precisely targeted alternatives.

Direct sales relationships with advertisers provide revenue stability independent of programmatic market changes. Publishers with strong editorial brands and defined audiences can leverage these assets to command premium pricing for directly sold inventory.

The Future of Open Web Advertising

The RTB settlement represents a critical inflection point for open web advertising, potentially accelerating the transition toward privacy-first advertising models while threatening revenue streams that sustain independent publishers. The three-year injunction period will serve as a testing ground for industry adaptation to reduced data availability.

Market forces beyond privacy regulation continue driving structural changes in digital advertising. Consumer migration to streaming video platforms, growth of social media advertising, expansion of retail media capabilities, and AI-powered content creation create alternative inventory sources that compete directly with traditional web publishers.

The settlement's impact will largely depend on user adoption rates of the RTB Control. Conservative estimates suggest limited adoption could minimize immediate revenue impacts, while widespread activation could fundamentally alter the programmatic advertising ecosystem's economics.

Timeline

• March 26, 2021: Original complaint filed in Hewitt v. Google LLC alleging privacy violations in real-time bidding system
• June 2021: Cases consolidated under In re Google RTB Consumer Privacy Litigation
• August 2021: Court appoints interim class counsel and plaintiffs' executive committee
• June 2022: Court largely denies Google's motion to dismiss, upholding statutory, privacy, and contract claims
• July 2023: Plaintiffs file initial motion for class certification for damages and injunctive relief
• April 2024: Court denies damages class certification with prejudice, denies injunctive relief class certification without prejudice
• May 6, 2025: Parties reach settlement in principle during mediation
• September 2, 2025: Final settlement agreement filed with motion for court approval
• December 12, 2025: Objection deadline for class members (projected)
• January 13, 2026: Earliest possible final approval hearing date

Summary

Who: Google LLC faces a nationwide class of individual U.S. Google account holders, estimated between 169 million and over 200 million users, represented by interim class counsel seeking court approval of a privacy settlement addressing real-time bidding practices.

What: The settlement establishes a new RTB Control allowing users to limit personal information shared in Google's advertising auctions, potentially valued between $1.4 billion and $21.6 billion over three years, while threatening open web display advertising revenue that has declined from 40% to 11% of Google's display impressions since 2019.

When: The agreement reached May 6, 2025, seeks court approval by January 13, 2026, with implementation required by February 13, 2026, during a period when Connected TV and retail media advertising growth diverts $60 billion annually from traditional web publishers.

Where: The Northern District of California will determine the settlement's final approval in markets where open web display advertising competes with rapidly growing alternative formats, while global regulatory pressure from Irish, UK, and Belgian data protection authorities influences privacy enforcement approaches.

Why: The settlement addresses contractual breach and privacy violation claims while occurring amid fundamental market transformation driven by AI advancement, streaming television growth, and retail media expansion that collectively threaten revenue streams sustaining open web publishers dependent on programmatic advertising efficiency.