DC eyes tighter regulations on Facebook and Google as concern grows
Every time a television station sells a political ad, a record is entered into a public file saying who bought the advertisement and how much money they spent.
In contrast, when Facebook or Google sells a political ad, there is no public record of that sale. That situation is of growing concern to politicians and legislators in Washington as digital advertising becomes an increasingly central part of American political campaigns. During the 2016 election, over $1.4bn was spent in online advertising, which represented a 789 percent increase over the 2012 election.
Online advertising is expected to become even more important in the 2018 midterms and the 2020 presidential election. However, while regulations governing television, radio and print ads are long established, there is little oversight in place for digital political ads. Broadcast television and radio stations are legally mandated to record who bought political ads and how muchthey spent. But online, political ad buyers are under no such obligations – and so the public are flying blind. The result is a landscape that one operative compared to “the wild west.”
For example, last week it was revealed that a Russian influence operation spent over $100,000 on Facebook during the 2016 election. As Democrat Mark Warner of Virginia warned recently, this expenditure could be “the tip of the iceberg.”
The revelation came as the growing influence of major tech companies has become a topic of bipartisan concern in Washington DC, and voices on Capitol Hill are getting louder about the need for more oversight of the digital giants’growing role in American politics.
Although some on the left have long raised concerns about the lack of competition for companies like Google and Amazon, the Trump administration has ushered in a new group of right-wing officials who are skepticalof these companies. Former White House aide Steve Bannon argued in favor of regulating Facebook and Google as public utilities, and White House press secretary Sarah Huckabee Sanders gave a pointedly muted response after Google received a record fine from the European Union. “I don’t have anything for us to wade in on a private company,” she said in June.
This has been joined on the left by increasingly vocal comments by prominent progressives like Bernie Sanders and Elizabeth Warren, who warned in a speech last year that major digital companies like Google and Amazon were “trying to snuff out competition.” This gained more attention in August when the liberal New American Foundation fired a scholar who had argued Google was a monopoly. The company, whose CEO Eric Schmidt was a prominent Clinton supporter, had donated heavily to the nonprofit.
This scrutiny is starting to extend to the role of online advertising in American politics. The FEC has reopened a comment period on its rule on disclaimers for online political advertising. However, it’s unclear whether this will lead to any change in its rules, which currently grant most online advertising an exception from regulations that require disclaimers, the small print stating who paid for a particular ad, on “electioneering communications.”
Oren Shur, the former director of paid media on Hillary Clinton’s presidential campaign told the Guardian, “you have everyone under the sun buying political ads online now. It’s where everything is least transparent.”
As a Democratic digital operative noted to the Guardian, “all advertising on television and radio can be linked back to an FEC filing report. Fundamentally the press and the public can understand who is buying advertising for the purposes of the election, at a basic level you ... can see who is spending what to influence an election and that’s just not true with Google, YouTube Facebook and Twitter.”
Facebook and Google now make up roughly 70-75% of political digital advertising sales, but the key question is whether there is any way to effectively implement a method of disclosure that makes transparency a reality. Jason Rosenbaum, the former digital director for the Clinton campaign, suggested these companies adopt a voluntary system of disclosure. He noted that cable companies, which are not expressly regulated by the FCC had long done this. Rosenbaum noted that legislative and regulatory solutions both face significant political obstacles and that it was hard to envision a technological way to track advertisements.
Instead, he thought a voluntary option would not only benefit the public but be good for platforms as it would enable them to sell more advertising which he noted is “what these companies do.” If a campaign knows a rival has bought advertising on an online platform, it is more likely to respond in kind and attempt to match the buy.
In the meantime, without a solution, skeptics of major tech platforms havewarned of the consequences.
Luther Lowe, vice president for public policy at Yelp and a vocal critic of Google, told the Guardian, “This is not standard monopoly abuse.” Lowe added, “When a dominant information firm abuses its monopoly, the same negative effects of reduced choice and higher prices as in other monopolies, but democracy and free speech are also undermined because these firms now control how information is accessed and how it flows.”
As Lowe noted, the concerns over the dominant role of Google and Facebook are not limited to the realm of political advertising. In the past week, Yelp filed an anti-trust complaint against Google, alleging that it is wrongly scraping Yelp’s content, and Facebook has come under attack for allowing advertisers to target content to users interested in topics like “Jew Haters.” But the potential that a foreign government used any of these platforms to influence the 2016 election looms over all of the other topics.