Russian Meddling Prompts States to Impose Online Ad Rules

(Bloomberg) -- U.S. states are tightening rules for online political advertising ahead of the November midterm elections as prospects dim that federal restrictions will be in place to prevent a repeat of the Russian interference seen in 2016.

As political campaigns dump millions of advertising dollars into Facebook Inc., Twitter Inc. and Alphabet Inc.’s Google, states including Maryland, Washington and New York are putting more pressure on tech companies to keep tabs.

California state senators held a hearing on Monday on a bill that would require internet companies to offer the public more information about the people or groups funding political ads for state and local candidates there.

“As most people are getting their news and information via social media, it is imperative that disclosure requirements also apply to ads appearing on these online platforms,” Democratic State Assemblyman Kevin Mullin, the bill’s sponsor, told the state Senate’s appropriations committee.

California’s actions come as efforts for stricter political ad disclosure rules for federal elections stall amid partisan rancor, even as national security officials and technology companies sound the alarm about so-called bad actor becoming more sophisticated in the ways they use social media to spread misinformation and sow discord in American civic life.

Facebook said last week that it’s uncovered an ongoing effort to meddle in the midterms and has deleted dozens of accounts and pages from people using false identities who were coordinating events and looking to stir up political unrest.

Tech companies are retooling their own policies to thwart the threat of foreign influence but don’t want to be subject to what they view as overly prescriptive requirements about how they disclose information on ads, or be held responsible for the accuracy of that information.

“Both platforms and advertisers share the responsibility of ensuring election advertisements are transparent,” said Noah Theran, a spokesman for the Internet Association, a Washington lobbying group that represents Facebook, Google and Twitter. “The details of any new legislation -- including disclosure and interface display requirements -- are critical to ensuring individual platforms are able to comply, and we are committed to working with legislators to find solutions.”

Google didn’t respond to a request for comment, and Twitter declined to comment. Facebook said it’s supportive of bills that have passed or are being considered in New York, California and Maryland.

Political ads represent a fraction of social media companies’ advertising dollars, but they can have an out-sized influence on the outcome of U.S. elections.

The consulting firm Borrell Associates of Williamsburg, Virginia, estimates that 20 percent of political ad spending in the U.S. this year will go to digital media. That’s a marked increase in online advertising spending from the 2014 midterm elections, when digital media accounted for less than 1 percent. Between May and July, advertisers spent as much as $72 million on online ads with political content, according to a recently released study from New York University researchers.

“Social media advertising has the potential to really change the way campaigns are run. It allows you to really micro-target” specific communities, said Laura Edelson, an NYU doctoral student and one of the authors of the study. For that reason, “it’s important to understand who is trying to influence us.”

Divisive Issues

Russian operatives bought thousands of ads on Facebook, Twitter and Google’s YouTube between 2015 and 2017, in many instances designed to stir the pot among Americans about divisive issues involving guns, Muslims, LGBT rights, immigration and race.

U.S. intelligence agencies have concluded that the operatives attempted to use social media to sway the 2016 presidential election and sow discord, and senior executives from Facebook, Google and Twitter have been called to testify in September before the Senate Intelligence Committee on efforts to prevent similar interference in the Nov. 6 races.

The California proposal would require social media companies to put a link on political ads connecting to a page displaying the identity of its funders. The bill would also require an online platform to maintain and display records of political ads by advertisers who spent $500 or more their platforms in the preceding year.

Assemblyman Mullin’s team is currently talking with Google, Facebook, Twitter and the Internet Association about a thorny set of questions concerning the visual requirements for the disclosures and the format they would take.

“We’re pragmatists,” Hugh Bower, Mullin’s chief of staff, said of the discussions. “We need to make sure that it’s functional.”

New York was among the first states to react to the Russian interference crisis with enhanced political ad rules. In April, Governor Andrew Cuomo signed a law that directs the state board of elections to create an archive of digital political advertisements, requires online platforms to check independent political advertisers’ paperwork and prohibits foreign entities from forming committees to buy local election-related ads.

“New York is proud to be leading the way to protect the sanctity of our elections,” Cuomo, who’s considered a potential 2020 Democratic presidential candidate, said in a statement. “In the face of the federal government’s complacency and inaction, New York will lead.”

Disclosure Requirements

Other states have followed suit with new rules that impose more disclosure requirements on digital companies. Maryland lawmakers recently passed legislation requiring digital sites with 100,000 or more monthly visitors to create public databases of political ads, and maintain records about an advertisement’s funders, the audience it targeted, and how much was paid.

“We wanted to make sure we were doing what we can to limit international interference in our elections. We wanted to make sure we could track who was buying political ads,” said state Senator Craig Zucker, a Democrat who sponsored the bill.

Facebook said it supports the new law while Google announced it would stop accepting local election-related ads.

Meanwhile, Washington state’s Public Disclosure Commission passed emergency guidance clarifying that online platforms must show on their websites information about political ads, including who sponsored the ads and how much was paid.

‘Important Questions’

State Attorney General Bob Ferguson later sued Facebook and Google, alleging the companies haven’t been complying with state political ad regulations already on the books. The commission hasn’t yet passed permanent guidance on digital political ads.

Google said it’s also not accepting election ads in Washington. Facebook’s director of product management Rob Leathern said in a statement that Ferguson “has raised important questions, and we look forward to resolving this matter with his office quickly.”

The new political ad rules in Maryland and New York faced a backlash from media trade groups wary of local governments requiring news organizations to publish or verify ad information.

“Any requirement that a news organization serve as a data collection agent for a state government entity runs counter to the recognition of news organizations’ independence,” New York News Publishers Association President Diane Kennedy wrote in comments to the New York State Board of Elections, which is working on final guidance for implementation of the law.

Federal Rules

Meanwhile, federal lawmakers attempting to pass their own political digital ad rules have met with less success.

Last year, Democratic Senators Mark Warner of Virginia and Amy Klobuchar of Minnesota proposed a bill to ensure online political ads would be subject to disclosure rules similar to those that govern advertising content in media such as TV and radio. The bill has garnered support from more than a dozen cosponsors, including Republican Senator John McCain, but hasn’t been voted on.

The Federal Election Commission is also considering two sets of proposed regulations that would require disclaimers identifying the sponsors of online, mobile and other forms of digital ads.

“What’s at stake is election integrity,” said Allie Bohm, policy counsel with the Washington-based interest group Public Knowledge. “We had a 2016 election that I think it is mostly not controversial to say has been mired in doubt and controversy.”

©2018 Bloomberg L.P.