The Federal Election Commission passed a new digital ad transparency rule on Thursday requiring anyone who places political advertising on the internet to disclose within the ad who paid for it. But a recent revision pulled back earlier language requiring those who promote digital political ads to disclose if they are being paid to do so.
The new rule is the brainchild of FEC chairman Allen Dickerson, a Republican, and Democratic commissioner Shana Broussard. Broussard neither spoke on the new rule during the meeting nor returned a request for comment from OpenSecrets. But during a June talk at the National Press Foundation, she said that the dissemination of political information is “shifting from the traditional sources of television and radio and it’s now moving online.”
Political spending on digital ads reported to the FEC skyrocketed to $933 million during the 2022 election cycle, according to OpenSecrets data, up from $440 million during the 2018 midterm election cycle. This is a conservative estimate, as a large portion of media spending is reported in such a way that it is impossible to differentiate between broadcast, print and digital ads, which are already less transparent than traditional media advertising.
On top of that, Axios reported that campaigns are increasingly turning to less-than-transparent digital advertising avenues by paying social media influencers who have, at times, failed to disclose the financial relationship.
Of the percentage of media spending where OpenSecrets had enough information to determine the type, digital ad spending reported to the FEC rose dramatically from 19% in 2014 to 45% in 2018 to 62% in 2022. Increasingly more money is flowing into federal elections, with the 2022 election being the most expensive midterm ever. That means more money and a greater share of it are going towards digital ads that have been loosely regulated – until now.
Federal campaign finance law requires political ads in broadcast or print media to clearly indicate who paid for the ad if it was placed by a political committee, expressly advocates for the election or defeat of a federal candidate or solicits a contribution.
Digital ads were not subject to the same disclosure requirements, as the legal definition of public communication expressly exempted internet communications. That exemption does not include paid web advertisements.
The new rule expands the definition of “public communication” to “any public communication over the internet that is placed for a fee on another person’s website, digital device, application, or advertising platform.” The new definition encompasses not only paid web ads, which were already subject to reporting requirements, but also paid digital ads that cover a full range of technological advances, including social media, streaming sites, mobile apps and wearable devices.
Text messages are not included under the new rule, the FEC press office confirmed to OpenSecrets.
As with traditional media disclosure requirements, digital ad disclosures stating who paid for the ad must be on the ad in a “clear and conspicuous manner.” The text of the disclaimers must be “of sufficient type size to be clearly readable by the recipient of the communication,” the new rule states, and have “a reasonable degree of color contrast between the background and the disclaimer’s text.” If the disclaimer is within a video, it must also be visible for four seconds.
A last-minute revision
The commission was set to consider the initial draft of the new rule in its Nov. 17 open meeting, which was canceled in the eleventh hour.
Internal pushback from FEC commissioner Sean Cooksey on the “burdensome and confusing” requirements and concerns from free speech advocates prompted a second draft. The revised draft limited the scope of digital ad disclosure requirements from people who “placed or promoted” paid political ads on the internet to only those who placed them.
Cooksey, a self-described advocate for “a robust internet exception” to the public communications definition, said he opposed the initial draft because it “dramatically expanded” the agency’s regulatory authority over speech online. The commissioner said the revised draft “will not unduly burden freedom of speech.”
The revised draft was ultimately approved by the commission, with only Commissioner Ellen Weintraub abstaining.
Weintraub, a Democratic member of the commission, supported the initial draft, which she said did a “better job of recognizing unique features of the internet and advertising on the internet.” While Weintraub moved to vote on the initial draft, it failed to pass the commission with only Broussard and Weintraub voting in favor.
In a public comment on the revised draft, Campaign Legal Center expressed “several concerns” with the omission of language in the revised rule and encouraged the commission to pass the initial draft rule.
Saurav Ghosh, director of federal campaign finance reform at Campaign Legal Center, told OpenSecrets that while the new rule was “certainly an improvement over the status quo,” the campaign finance watchdog remains concerned about potential “consequences” that could arise.
The revised draft also excluded digital ads disseminated by a “service” from the definition of public communications. Campaign Legal Center warned digital ad dissemination might not fit neatly into remaining categories of a “website, digital device, application, or advertising platform,” opening the FEC to legal challenges to its regulatory authority over digital ads.
Nevertheless, Ghosh expressed “guarded optimism.”
Upon passage of the new rule, Dickerson quoted a former Democratic commissioner who recently noted the FEC was waking from a “long slumber.” Indeed, this morning’s meeting was “arguably the most productive I’ve seen in years,” tweeted Daniel Weiner, director of the elections and government program at New York University’s Brennan Center.
The chairman then turned to federal campaign finance regulations overall, calling the agency’s code of federal regulations “horrifically out of date” and “actively misleading in portions, out of date in others.”
He encouraged the public to submit comments on new rules as the agency moves to deconflict at times contradictory rules currently on the books. Cooksey also said, “When we put it out for public comment, we mean it.”
Dickerson added: “It is a work in progress, and that work has been delayed for too long.”