Russian Ads on Facebook Prompt Calls to End the Web’s ‘Wild West’

  • Political ad spending surges online with little disclosure
  • FEC has not updated rules on internet advertising since 2006

Facebook to Go Before Senate Panel on Russian Meddling

Social media platforms are capturing a growing share of political advertising in the U.S. and the revelation that Russian interests used Facebook to influence the presidential election are stirring calls for greater transparency.

Television stations, cable and satellite companies and radio stations all must keep records of and disclose who pays for political messages on their outlets, how much they paid, and when the ads aired. As early as 1927, Congress passed a law barring radio stations from broadcasting any ad that didn’t identify its sponsor.

But Congress has so far taken a hands-off approach to the internet, which accounted for an estimated $750 million in political advertising last year.

"It’s the wild west right now," said Alex Howard, deputy director of the Sunlight Foundation, a nonprofit that’s advocated for better disclosure of online political spending. "We don’t know what the ads are or who’s behind them."

Facebook Inc. has acknowledged about $100,000 in ad spending connected to fake accounts probably run from Russia and is expected to be called before the Senate Intelligence Committee for a public hearing in October. Russia’s effort to influence U.S. voters through social media is also a focus of special counsel Robert Mueller’s investigation into the 2016 election and possible links to President Donald Trump’s associates, according to U.S. officials familiar with the matter.

Read more: Facebook Faces Calls for New Disclosure Rules Amid Russia Probe

On Wednesday, a group of Democrats sent a letter to the Federal Election Commission saying more transparency is needed for Facebook and other social media networks when it comes to political spending.

“It just raises the issue of who’s spending what in our elections and what negative impact it is it having,” said Congressman John Sarbanes of Maryland.

Sarbanes signed the letter along with Representatives Elijah Cummings and John Conyers, the ranking Democrats on the Oversight and Government Reform and Judiciary committees. Democratic Senators Martin Heinrich and Ron Wyden, both members of the Intelligence Committee, also signed.

Sarbanes wants the FEC to follow up with new rules requiring disclosure for political ads on social media outlets, including Facebook and Twitter, so they are as transparent as broadcast ads. He said the FEC has the existing authority to do this and it can act without congressional intervention.

A Facebook spokesperson said the company was open to reviewing any specific Congressional proposals. Twitter Inc. is cooperating with the intelligence committee and will meet with its staff members next week, according to a statement from the company.

Ellen Weintraub, an FEC commissioner who’s pushed her colleagues to investigate foreign money, noted that one of the problems with overseeing social media companies is the way the firms deliver ads to their users. "People don’t even know what ads are out there because they’re targeted in different ways to different people."

Earlier: Mueller Probe Said to Have ‘Red-Hot’ Focus on Social Media

Weintraub said Congress could require a database of online ads, including information on sponsors, audiences targeted and the ads themselves. She thinks that might dissuade foreigners from spending on social media to influence elections. "Getting disclosure has a deterrent effect," she said.

Weintraub, a Democrat, said the FEC has already voted to solicit public comments on disclosure requirements for online ads. 

"It would be worthwhile for us to have a hearing," she said. "I think we ought to invite Facebook and Google and Twitter and knowledgeable people to come in and tell us how political campaigns are using these platforms, how can we provide better information to the American people."

The amount of money allocated to digital political advertising is still dwarfed by television advertising but has increased rapidly in recent years, from $250 million in 2012 to more than $750 million in 2016, according to Steve Passwaiter, president of Kantar Media CMAG. 

Reaching voters via digital advertising, particularly social media, offers advantages that traditional advertising does not.

"The ability to take a mass message and craft it down to a group of voters based on certain data sets -- who wouldn’t want to do that?" Passwaiter said. "That’s the allure of the Internet for everybody, political and non-political advertisers."

Video: Facebook to Go Before Senate Panel on Russia Probe

A large part of the challenge surrounding tracking advertising online is the difficulty regulators face in determining exactly what constitutes "digital" advertising, according to Passwaiter.

"Is it display? Is it video? Is that all we’re interested in?" Passwaiter said. "Or are we interested in what’s being done in email marketing? So you first have to define what the platforms are that you’re interested in."

Another reason it’s hard to police Facebook is that much of the advertising is purchased not through a salesperson, but through a self-service system, which allows buyers to set their own targeting parameters for an audience. The company reviews the ads through a mix of automatic and manual processes, but mostly to ensure that the ads fit rules for the platform -- not to evaluate the nature of the buyer.

Broadcasters have been required to maintain records identifying political-ad buyers since 1938. Requirements then were much like those in place now: to include candidate requests for time and the charges made for the broadcast time. Other groups airing political messages, including trade associations and advocacy organizations, have to disclose their officers or directors.

More: Google Goes From White House to Doghouse in Trump-Era Tech Snub

In 2012 the Federal Communications Commission began requiring television stations to make political-ad information available on a website maintained by the agency. In the initial two years of operation the site received nearly 5 million page views, the FCC said.

Last year after a request from open-records advocates, the agency extended online disclosure requirements to radio stations, cable operators, and satellite-TV providers. Those providers, like TV stations, already had longstanding political ad-disclosure requirements -- dating to 1974 for cable, and 1998 for satellite services.

The last time the FEC issued a ruling on internet advertising was in 2006, the year after YouTube was founded. The ruling required individuals and committees buying online political ads to disclose the spending. But it doesn’t require disclosure by the platforms running the ads.

Disclosure Gap

The FEC’s 2006 rule applied to "paid Internet advertising placed on another person’s website, but does not encompass any other form of Internet communication."

That’s left a huge hole in disclosure, experts say, and an opening for foreign money.

Social media companies came of age in a hands-off regulatory environment, according to Meredith McGehee, chief of policy, programs and strategy at Issue One, a group that seeks to limit the impact of large donors on politicians.

For years, federal law barred states from collecting sales tax on online sales, and Congress and agencies similarly tried to avoid placing regulatory burdens on companies doing business on the internet, including the kinds of political ad disclosure required from radio, television, cable and satellite companies.

"The problem now is that in the communications area, we have laws based on the technology of the 1930s and in the campaign finance area, we have laws based on the technology of the 1970s," McGehee said.

— With assistance by Laura Litvan, and Sarah Frier

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