New bill would make political digital ads ‘honest’

The lure of online advertising by political operatives may become less bright if a bipartisan bill introduced on Thursday becomes law. The proposed Honest Ads Act would require the largest digital advertising players to face the same transparency and disclosure requirements as ads sold on radio, television and cable and satellite TV. “They have an obligation–—just like TV and radio has—to disclose this to the public,” Sen. Amy Klobuchar (D-MN) said during a Capitol Hill press conference.

The legislation, which Klobuchar introduced with Sen. Mark Warner (D-VA), would amend the 2002 Bipartisan Campaign Reform Act by revising the definition of electioneering communication to include paid internet and digital advertisements. Radio station websites wouldn’t fall under the new law, however. That’s because the proposal initially calls for only requiring disclosures from digital platforms with an average of 50 million monthly viewers or more. It would also only cover any person or group that spends $5,000 or more on their digital ad buy. Web companies would be required to place in the public file a copy of the digital ad, a description of what audience the ad is targeting, the number of views generated, the dates and times of publication, the rates charged, and the contact information of the purchaser. “It’s putting this on par with where television and radio are today,” Klobuchar said.

Digital ads would also need to contain some disclosure of the person or group that paid for the ad similar to how radio, TV and print spots already include “paid for” tag lines. “If it’s audio on the internet, it’s the radio standard,” Klobuchar said.

The legislation comes as lawmakers look to respond to foreign actors stepping into the 2016 presidential election, including the recent revelation that Facebook sold $100,000 of campaign ads to Russian entities, which paid in rubles. That national security angle has led Sen. John McCain (R-AZ) to throw his support behind the bill. “Unfortunately, U.S. laws requiring transparency in political campaigns have not kept pace with rapid advances in technology, allowing our adversaries to take advantage of these loopholes to influence millions of American voters with impunity,” he said in a statement. McCain has long been a champion of campaign finance reform and his backing could help bring the bill to a hearing in a GOP-controlled Congress.

Digital Companies Cool to Disclosure Proposals

Kantar CMAG calculates $1.4 billion was spent on digital advertising during the 2016 election. Of that, it’s estimated that Google and Facebook received 85% of the dollars spent. The online community is casting a wary eye at the new proposal. The Interactive Advertising Bureau (IAB) didn’t wait for the bill to be revealed. Earlier this month it raised the specter of using a constitutional argument to fight any proposals it views as too intrusive. Dave Grimaldi, executive VP of public policy at IAB, said the trade group is “ready to work” with authors to consider “new approaches” to increasing transparency. “Preventing interference in U.S. elections is essential, and our industry is committed to sensible reform that achieves that goal while preserving free expression,” he said in a statement.

The Internet Association said it is reviewing the legislation and it too is open to working with the sponsors. “This is an important issue that deserves attention and the internet industry is working with legislators in both the House and Senate interested in political advertising legislation,” Association president Michael Beckerman said.

Meanwhile, in an effort to sidestep federal regulations, Facebook CEO Mark Zuckerberg announced last month that the company will voluntarily put disclosure requirements into place for all political ad buys on its platform. He also announced the hiring of more than 250 employees to monitor political ads, which are typically bought through automated buying systems. They won’t, however, require ads to be preapproved.

But Warner said their proposal uses a “light touch” with its first step at regulating internet ads. “We don’t want to slow down innovation and technology,” he said.

Klobuchar also pointed out that 65% of Americans now get political news from the internet according to Pew—that’s up from 18% compared to 2006. “That’s a major change, and they have to change with that,” she said. “They’re making money off of it, just like radio, just like TV, and so the same rules should apply.”

Their proposal has already won the backing of several public interest groups. Sunlight Foundation deputy director Alexander Howard said transparency and accountability have taken on new relevance in the wake of the 2016 election. “We hope this bill, which merits serious consideration, catalyzes an overdue public debate and substantive action in Congress and the Federal Election Commission to create platform parity for political ad disclosure across TV, radio, print and Internet companies,” he said.

Other organizations, including the Campaign Legal Center, the Brennan Center, Common Cause and Free Press have all gone on record as supporting the bill. “As online advertising grows, the public must be able to know who is paying to influence our elections,” Free Press attorney Gaurav Laroia said. “The bill represents the tip of a very large iceberg as new media gatekeepers like Facebook, Google and Twitter come under much-needed scrutiny for their role in our economy and our society.”

With the 2018 midterm elections just a year away, Klobuchar said for the proposal to realistically have any impact on next year’s campaign season it will need to be passed into during the next several months. Companion bipartisan legislation was introduced in the House by Reps. Derek Kilmer (D-WA) and Mike Coffman (R-CO). Klobuchar is hopeful that could come either as a standalone bill or as an amendment on another piece of legislation.

A hearing is slated on the topic for Nov. 1 and Facebook, Google and Twitter have already agreed to send representatives to appear before lawmakers. “It’s our hope that the social media companies and platform companies will work with us,” Warner said.

Source: Inside Radio