Federal Election Commission Is Weighing New Rules for Online Ads

(Bloomberg) -- The Federal Election Commission opened two days of hearings Wednesday to consider approaches to requiring sponsorship disclosures for online political advertising.

The agency, which oversees federal election laws, is taking testimony from 18 witnesses from public interest groups, political organizations and ad buyers as it considers multiple approaches to letting audiences know who’s sponsoring the political speech they’re seeing online.

Current FEC regulations require political committees that register with the agency and disclose their donors and spending to the commission to include disclaimers when they pay for digital communications, including everything from YouTube videos to emails. Ads from nonprofits and others that advocate for or against a candidate must include those disclaimers too. But those rules don’t apply to ads that mention political candidates critically without explicitly advocating for or against them.

“It’s important to get this right,” said Vice Chairwoman Ellen Weintraub, a Democrat, who favors greater disclosure. “It’s important to get a rule in place this year.”

Tech Platforms

Whether that’s possible with the November elections just 131 days away is another question. The FEC received more than 165,800 comments on its proposed rules for internet ad disclaimers, including from tech and social media giants Facebook Inc., Alphabet Inc.’s Google and Twitter Inc. Russians used platforms run by all three companies to purchase political advertising in the 2016 election.

None of the tech companies sent representatives to testify, which Weintraub lamented, saying that they’d be able to provide expertise that constitutional lawyers, who made up the first panel of witnesses, wouldn’t have.

The FEC hearing comes amid explosive growth in online political ads. In 2018, digital platforms are expected to see $1.9 billion in spending from candidates and political organizations, up from just $71 million in 2014, according to a study by Borrell Associates, an advertising research group.

In 2016, President Donald Trump’s campaign focused heavily on Facebook and other digital media. Brad Parscale, who served as digital director and is now campaign manager for Trump’s reelection effort, said that the platform was central to his efforts. It’s a shift from previous cycles in which spending on television was key to reaching voters.

Substantial Transformation

“It’s no exaggeration to say over the last twelve years that transformation has been substantial,” Matthew Petersen, a Republican commissioner, said of the shift to digital spending, which he said provides a relatively low-cost means of reaching voters. He pointed out that current election laws were written to apply to traditional media, like television and radio, and don’t address the complexity of online advertising.

That complexity was reflected in a 20-page document the FEC provided at the hearing, featuring dozens of examples of disclaimer options for different types of digital ads instructing citizens to “Vote John Doe.”

Digital advertising has been further complicated by platforms like Facebook and Google, each of which asked the FEC for exemptions from disclaimer requirements for some ads. In 2010, the commission granted Google an exemption from the requirement provided that its smallest ads linked back to the sponsoring committee’s website. In 2011, the commission deadlocked on granting Facebook the same kind of exemption, in part because the online ads it was selling didn’t always link back to the website of sponsor.

Facebook Archive

Facebook now features a political ad archive letting users see who’s sponsoring ads and who they are targeted to, and flags political ads that don’t include sponsorship information. Requiring digital platforms to make such disclosures would require a change in election laws. The FEC’s rules would instead regulate political spenders, requiring them to tell voters that they’re sponsoring an ad.

“That’s why we’re here, to educate the public on the flow of money,” Commissioner Steven Walther, an independent, said.

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