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Digital Business Lawyer

Proposed Honest Ads Act continues the debate on online ad transparency

US senators John McCain, Amy Klobuchar and Mark Warner proposed on 19 October 2017 the bipartisan Honest Ads Act (the ‘Bill’), which would extend the application of disclosure and monitoring requirements for politically driven advertising to specifically include adverts which appear on online platforms. The Bill, if signed into law in its current state, would amend definitions in the Bipartisan Campaign Reform Act 2002 and the Federal Election Campaign Act 1971 to require digital or internet-based advertising in all forms to comply with the same disclosure requirements that apply to traditional broadcasting platforms. The Bill would also require an online platform to maintain a ‘complete record’ of any request to purchase ‘a qualified political advertisement’ made by a person whose aggregate requests to purchase such political ads exceeds $500 during the preceding 12 months and make such records available for public inspection.

“The Bill is well intentioned, but would do little to regulate the flow of political advertising through digital platforms,” said Christopher Cole, Partner at Crowell & Moring. “My sense is that the platforms themselves will have a bigger impact. For example, Facebook has announced that it will add more than 1,000 people to global ad review teams and require more thorough documentation from persons who buy election-related ads. There were undoubtedly more than 3,000 ads purchased for $100,000 by the Russian Internet Research Agency at issue in the 2016 election. The fact that we are focusing on those 3,000, however, illustrates the magnitude of a problem that defies easy solutions.” Facebook announced on 6 September 2017 that it would be stepping up its efforts to increase the transparency of political advertising, stating that the purchase by Russia of 3,000 ads “likely” influenced the 2016 US Presidential Election. Twitter also announced plans, on 24 October 2017, to launch “an industry-leading transparency center” that it hopes will offer visibility as to who is advertising on Twitter. According to Twitter’s press release the new Advertising Transparency Center will display all ads running on Twitter, how long the ads have been running, the ad creative associated with the campaigns, and the ads targeted to a specific user, as well as personalised information on which ads a user is eligible to receive based on targeting.

Senator McCain referred to the possibility of international actors’ interference in the electoral process as an instigator of the Bill in a statement on his website. “In the wake of Russia’s attack on the 2016 election, it is more important than ever to strengthen our defenses against foreign interference in our elections,” stated McCain. “Unfortunately, US laws requiring transparency in political campaigns have not kept pace with rapid advances in technology.” Section 9 of the Bill specifically requires that all online platforms ‘make reasonable efforts to ensure that communications […] are not purchased by a foreign national, directly or indirectly.’ Francisco Montero, Managing Partner at Fletcher, Heald & Hildreth, comments that “given the current political climate and what is being increasingly revealed as to foreign attempts to influence US elections and particularly efforts to foment political, economic and racial divisions in American and European society, I think there is a groundswell of interest in having information like this disclosed. Over time, I see public and congressional Republican support [for the Bill] increasing.”

Cole however believes that it is very unlikely that the Bill will be signed into law. “The rest of the Republican Senators have been publically noncommittal. Its chances in the House are even lower, as no law that imposes an iota of additional burden on business has much of a chance there. I won’t even begin to predict how President Trump would view the Bill if it reached his desk for signature,” explains Cole. “And, even if the Bill makes it through all of those hoops, I will bet that it will be challenged in court almost immediately.”

Regardless of the success of the Bill, Cole believes the real debate is over how online platforms choose to move forward on the issue of transparency themselves. “With estimates of 33-50% of all digital ad dollars currently being lost to ad fraud, we are kidding ourselves if we think a law will solve the issue of foreign influence on our social media electioneering,” adds Cole. “Platforms such as Google, Twitter and Facebook face a dilemma. They have all profited enormously in part because voters have migrated online to seek and share information. The ethos of those platforms has been to remain neutral and to allow the free flow of information, barring overt threats of violence or racism. However, the notion that they can continue to maintain this neutral stance in the face of widespread manipulation of their technologies is quaint. Having created and sold the tools to target consumers based on the vast treasure troves of data that they have collected, they bear a responsibility to ensure that those vulnerable consumers are not misled as to the source and purpose of what they are seeing.”

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