Google Got Called “Really Unfair” in Court This Week. It Shipped More AI Mode Ads Anyway.
Google isn’t testing whether to sell ads inside AI Mode. It’s already doing it — three days after a judge called it unfair.
Same week Google defaults more searches into a fuller AI Mode answer, it shipped two new AI Mode ad formats. A judge in a separate hearing called the underlying arrangement “really unfair.” Nobody covering either story connected them.
A client sent me a screenshot this week — her own product category, searched from her phone, mid-scroll. The AI Mode answer took up her whole screen before she reached a single organic result. Three shopping ads were sitting inside it, styled almost exactly like the free listings next to them. She asked if that was new.
Not exactly. Ads have been showing up in AI Mode since November. What's new is what happened three days after a federal judge told Google, in open court, that using publisher content for free to build features like this one “seems really unfair.”
Google shipped two more ad formats into AI Mode.
Same week. Same feature the judge was talking about. Nobody covering the ad rollout mentioned the hearing. Nobody covering the hearing mentioned the ads. I think that's the actual story.
- AI Overviews are now testing default expansion into full AI Mode answers — no click, no warning, confirmed by Google Aug 27–28.
- Three days later, Google shipped two new AI Mode ad formats — an inline Shopping carousel and a new bottom-of-response unit — on top of five already live.
- Ahrefs: an AI Overview now cuts click-through to the #1 result by 58%, up from 34.5% eight months ago.
- Semrush: the share of AI Overview pages carrying a Google ad grew 394% in eight months — and it happened all at once, not gradually.
- A federal judge in a separate antitrust hearing called Google’s use of publisher content “really unfair” the same week — no ruling yet.
- None of this — ad placement, ad targeting, or opting out of it — is something you currently control.
What happened, in order
August 27–28: Google confirmed it's testing AI Overviews that expand into a full AI Mode answer by default.
That means there’s no “Show more” click required to get there. And those precious ten blue links pushed further down than they've ever gone.
SEO practitioner Chris Long spotted it first on X, and a Google spokesperson told Search Engine Roundtable: “For some queries, AI Overviews may dynamically expand for topics where our systems determine it's most useful for people.”
Google's Robby Stein added the one real safeguard, on X: if you've already started scrolling, the expansion cancels so you don't lose your place.
Beyond that, it's Google's own word for it — still “testing and tuning.”
Now, here’s what makes this extra interesting…
August 28: In a hearing on Penske Media's antitrust suit against Google, U.S. District Judge Amit Mehta — the same judge who ruled in 2024 that Google runs an illegal monopoly in general search — told Google's lawyers the arrangement with publishers “all seems really unfair.”
Google's defense? AI Overviews are a “product improvement,” and the old deal — crawl my site, send me traffic — was just a “vague historical course of dealing” publishers could always walk away from.
“It all seems really unfair.”
— Judge Amit Mehta, U.S. District Court · Penske Media v. Google hearing, Aug 28, 2026
Penske's lawyers pointed out that OpenAI and Perplexity pay licensing fees for the same kind of content Google takes for free. No ruling yet.
August 31: Google added an inline Shopping carousel and a new ad unit to the bottom of AI Mode responses. Two more formats, on top of five already live.
I don't think Google is waiting to see how the lawsuit lands before it decides how far to push this. Instead, it knows where the money is, and it’s just building faster.
“For some queries, AI Overviews may dynamically expand for topics where our systems determine it’s most useful for people. Our research has shown that with this dynamic experience, users find Search more helpful and engage deeper in follow-up exploration.”
— Google spokesperson, via Search Engine Roundtable, Aug 28, 2026
Five ways Google's already selling space inside your answer
Ads haven't been in AI Mode long — since November 2025, with testing running for months before that — but there are already five distinct formats live:
Bottom text-based ads, stacked at the end of the response, with a headline written to match your query.
Bottom Shopping carousel ads — ecommerce only, product photo, price, reviews, in a row.
In-line Shopping ads that blend with the free listings — same visual treatment, routed through a tracked redirect when clicked.
In-line non-rich Shopping ads — a slimmer unit, usually near the top, just a favicon and a price.
Sponsored product grid ads, which can outrank the free listings entirely — up to four ads before you see a single organic result, with a “trending brand” label that makes the ad look more credible than the listings next to it.
None of that is something you can target your way around. Advertisers can't choose where their ad shows up inside AI Mode — it's automatic.
There's no reporting yet that separates AI Mode performance from the rest of a campaign.
And there's no way to keep your organic content from sitting next to these ads specifically — Search Console's new blocking controls are a different setting, for a different problem.
So, what is this costing you?
Ahrefs re-ran its click-through study on December 2025 data and found that an AI Overview now cuts the click-through rate for the #1 result by 58% — up from 34.5% just eight months before.
lower click-through for the #1 result when an AI Overview is present
Ahrefs’ re-run of its study (Dec 2025 data) — up from 34.5% just eight months earlier. Even position 10 is down 19.4%.
It's not only the top spot. Position five is down 32.6%. Even position ten is down almost 20%.
Semrush found the other half of it. The share of AI Overview results pages that also carry a Google ad jumped from about 5% to over 25% in eight months — a 394% increase — and it didn't creep up gradually.
It happened all at once, in September, across every placement on the page simultaneously.
Semrush calls that “an intentional adjustment,” not drift.
And it makes sense once you see why: the queries triggering AI Overviews shifted hard toward commercial intent over the same stretch, from 91% purely informational down to 57% — meaning more of what AI Overviews now answer is exactly the kind of question advertisers pay to sit next to.
Less of the click reaches the page that earned the ranking. More of the page belongs to Google's own ad inventory. That's the whole story, underneath the headlines.
| Position in search results | Click-through rate impact |
|---|---|
| 1 | −58.0% |
| 2 | −50.8% |
| 3 | −46.4% |
| 4 | −38.8% |
| 5 | −32.6% |
| 6 | −30.5% |
| 7 | −29.7% |
| 8 | −28.8% |
| 9 | −29.7% |
| 10 | −19.4% |
Is this a five-alarm fire?
No, not really. Citations inside AI answers are up more than fivefold over the past year. (Similarweb data reported by TechCrunch)
And after a ChatGPT update in May, the share of ChatGPT visits that truly land on a real page jumped from a quarter to nearly two-thirds in about two months.
That just proves what I’ve said all along: when a citation is placed well, people still click it.
What I won't do is tell you that this is going to settle down any time soon.
Everything documented above happened inside one week, and every one of them moved in Google's direction. The ad load, the click economics, what even counts as a citation — none of it is holding still long enough to plan around.
What I'd tell a client right now
Don't rewrite your content strategy over one court hearing or one ad screenshot.
Do stop assuming the ground under AI visibility is going to stabilize before you act on it.
After all, the data above says the opposite. And waiting for Google to slow down is a bet against everything that's actually happened this month.
Google is being told, in federal court, that this arrangement looks unfair to the people whose content built it.
It answered by shipping more ads inside it three days later.
3 moves while Google keeps building
01
Don’t wait for stable ground
Every documented move this month went Google’s direction. Waiting for it to settle is a bet against the trend.
02
Build for citation, not just clicks
Citation is a shrinking prize, not a stable one — treat it as the new position one, not the finish line.
03
Screenshot your baseline now
Date it. As the ad load and the default-expansion test both keep moving, you’ll want to know what changed and when.
I've written about pieces of this before:
What AI Overviews reward when they show up, not just that they cost you clicks
A Reddit citation source that shifted overnight with no explanation
A licensing deal you'll never be offered — no matter how good your work is
This is that same story, one layer closer to the money. Google isn't just deciding what gets cited anymore. It's deciding what gets sold around the citation, on a timeline nobody outside Google gets a vote on.
How much of your AI visibility is worth defending — and how much has Google already sold the space around?
Most people do one of two things with news like this: panic and rewrite everything, or ignore it and hope it settles. Neither one is a strategy.
I audit where you’re actually cited today, what that citation’s worth now that the ad load’s grown around it, and what’s worth fixing first.
Book a GEO Visibility Audit →Fiverr Pro vetted · 4.9 stars · 1,600+ client reviews
FAQ
Is Google testing making AI Overviews expand into full AI Mode by default?
Yes, confirmed by Google as of August 27–28, 2026. For some queries, the AI Overview now loads fully expanded — including the follow-up “Ask anything” box — without a click, pushing organic results further down. Google says this is still being tested and tuned, not a confirmed permanent or global change.
Does Google show ads inside AI Mode?
Yes. Five distinct ad formats are confirmed live as of this writing, including two that shipped August 31, 2026 — an inline Shopping carousel and a bottom-of-response ad unit. Ads have appeared in AI Mode in some form since November 2025.
Can I keep my content — or my ads — away from AI Mode’s ad units?
Not directly. Advertisers can’t control or target placement inside AI Mode; it’s automatic. Publishers can block organic content from AI Overviews and AI Mode through a separate Search Console setting, but that doesn’t touch ad placement and comes with its own trade-offs.
How much do AI Overviews reduce clicks to the ranked page?
Ahrefs’ most recent study found a 58% lower click-through rate for the position-one result when an AI Overview is present — up from 34.5% in the same study roughly eight months earlier.
Is there a lawsuit over this?
Yes. Penske Media sued Google in September 2025 over its use of publisher content in AI Overviews. In an August 2026 hearing, the judge overseeing the case — who separately ruled Google holds an illegal monopoly in general search — said the arrangement “seems really unfair.” No ruling on Google’s motion to dismiss has been issued yet.
How This Was Made
Every claim above was checked directly against primary sources — Google's own statements, Ahrefs, Semrush, and court reporting — before publishing. Researched, directed, and signed off by Brad Bartlett — the name on this post is the name accountable for what's in it.
Written by
Brad Bartlett
Brad is a copywriter and content strategist who helps creators, brands, and organizations build content that's actually worth reading — and built to be found. He specializes in conversion-focused copy, brand voice, and SEO and AI search optimization, with a straightforward philosophy: great content has to be authentic before it can perform. He works comfortably across the AI content space, helping clients use the tools without losing the voice. Fiverr Pro vetted, 4.9 stars out of 5 across 1,600+ clients.