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This is what Silicon Valley feared:



McCain signs on to Democrats' Facebook ad disclosure bill
ASHLEY GOLD10/18/2017 02:27 PM EDT
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The move by Sen. John McCain marks a win for the bill's Democratic authors, who have been working for weeks to secure GOP support. | J. Scott Applewhite/AP Photo

Sen. John McCain has become the first Republican to sign on to a draft bill from Democrats Amy Klobuchar and Mark Warner that would increase the transparency of political advertisements on social media platforms like Facebook.

The move, announced Wednesday, marks a win for the bill's Democratic authors, who have been working for weeks to secure GOP support.

The proposed legislation, the Honest Ads Act, is an offshoot of the investigations into Russia's use of Facebook, Twitter and Google to influence the 2016 election. It would create federal disclosure requirements for political ads sold online — including who paid for them — so they are "covered by the same rules as ads sold on TV, radio, and satellite," according to a news release.

"This is the first substantive bipartisan piece of legislation that’s trying to — with a very light touch, because we don’t want to slow down innovation, or restrict free speech or people’s access to the internet — to deal with the problem that we saw in 2016 in terms of foreign interference in our electoral process," Warner told reporters.

McCain said he backed the bill “for the same reason I have been for transparency in campaign finance reform for the last 25 years." He said he didn't know if other Republicans would get on board or if GOP leadership supports the proposal.

As POLITICO previously reported, lobbyists for Facebook and Google have sought early input on the draft bill. Klobuchar said the measure did not yet have the support of tech companies.

POLITICO Playbook and get the latest news, every morning — in your inbox.

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New bill aims to make online political ads more transparent


New bill aims to make online political ads more transparent



Sens. Amy Klobuchar and Mark Warner introduce the bill on Wednesday. Photo: Jacquelyn Martin / AP

A bipartisan group of senators rolled out a bill Wednesday that would set new transparency requirements for online political ads, with an eye towards platforms like Google and Facebook.

Why it matters: Russian operatives allegedly used Facebook, Google and Twitter in an election meddling campaign in 2016. Those companies don't support the legislation yet.

The details:

  • Large platforms would have keep records on political ads (who was targeted and other details) once an advertiser spent $500 on political ads in the previous 12 months — a relatively low threshold. Platforms could be penalized by the Federal Election Commission for failing to comply.
  • The bill puts disclaimer requirements on online political ads by updating the FEC's definition of an "electioneering communication" to include digital ads.
  • It would also require online platforms, as well as broadcast stations, to take steps to stop foreign election interference.
What's next?: It's not clear the bill has the support to move forward; John McCain is the only Republican currently supporting it. Democrat Amy Klobuchar, one of the bill's sponsors along with Virginia's Mark Warner, said the lawmakers were answering questions from colleagues who haven't yet signed on.
 

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Senators Propose Social-Media Ad Rules After Months of Russia Probes

Senators Propose Social-Media Ad Rules After Months of Russia Probes
More stories by Steven T. DennisOctober 19, 2017, 2:00 PM EDT
By
Steven T. Dennis
  • Bipartisan bill requires disclosure of political advertising

  • Other bills drafted to counter Russia hacking, influence
Why Robert Mueller Is the Perfect Man for the Job

After months of congressional investigations into Russian interference with U.S. elections, legislation is gaining traction as senators introduced a bipartisan plan to impose new disclosure requirements for political ads on Facebook, Twitter, Google and other social media.

"Election security is national security," said Democratic Senator Amy Klobuchar at a news conference Thursday announcing a bill to require disclosure of who’s paying for online political ads. Internet social networks are "dwarfing" broadcasters in the number of users, she said, adding, "Americans deserve to know who is paying for the online ads."

GOP Senator John McCain gave a big boost to the proposal by Klobuchar and Democrat Mark Warner, announcing he’ll co-sponsor the bill.

“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,” McCain said in a statement. “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."

The bill would require digital platforms with as least 50 million monthly viewers to maintain a public file of all election-related ads from people who purchase at least $500 worth of such advertising on their network.

The bill also would require the companies to make all reasonable efforts to prevent foreign individuals and entities from purchasing ads to affect the electorate -- ads that are already illegal under the law.

In two weeks, executives for the social media giants are due to testify at public hearings about Russia’s use of their networks to interfere in the 2016 election.

While televised political ads require disclosure of who paid for them, there are no such requirements for social media networks. The proposal by Klobuchar and Warner is intended to bring social media ads up to the broadcast standard.

Until now, Congress’s reaction to Russian meddling has been to open investigationsand to strengthen economic sanctions against the country. President Donald Trump, whose campaign is under investigation over possible collusion with Moscow, has wavered about whether he thinks Russia meddled in the election and insisted his campaign didn’t collude.

But lawmakers in both parties say now is the time to act, before the 2018 midterm elections, when intelligence officials expect a continued Russian effort to interfere.

Shell Companies
Bipartisan efforts also are under way to protect voting machines and databases from cyber intrusions and to more easily identify Russian attempts at influencing U.S. elections by requiring shell companies to disclose their owners.

It’s not clear whether Republican House and Senate leaders or the White House will back the various efforts, although Attorney General Jeff Sessions said at a hearing Wednesday he’s willing to work with lawmakers on issues such as cybersecurity.

Lawmakers’ focus on social media comes after Facebook Inc., Twitter Inc. and Google owner Alphabet Inc. acknowledged Russian exploitation of their networks to spread propaganda and chaos. Representatives from the companies are scheduled to testify before Congress on Nov. 1.

Facebook Chief Operating Officer Sheryl Sandberg said last week the company would hire 4,000 workers to improve vetting of online advertising and identification of fake accounts. Sandberg said the network wants to create a "new standard" for transparency.

Linked Accounts
Facebook has said about 470 Russia-linked accounts purchased advertising seeking to create strife, prompting Twitter to identify bogus accounts on its own network linked to the Facebook profiles.

Facebook General Counsel Colin Stretch will represent the company at the House and Senate hearings, according to a spokesman. Stretch has been leading the company security team’s internal investigation into the scope and impact of Russian ads on the platform before the election.

Stretch is also a veteran at thinking about Facebook’s role in political advertising. In 2011, he wrote an opinion for the company that told the Federal Election Commission that disclosure rules "should not stand in the way of innovation.”

Facebook lobbied for years to prevent disclosure requirements for online media. By contrast, the requirements for political ads on television, which are enforced by the Federal Election Commission, include who is financing ads and how much is being spent on them.

Twitter acting General Counsel Sean Edgett will represent the company at the congressional hearings, a company spokesman said.

Klobuchar of Minnesota said a day earlier that under the bill, social media would have to follow the same rules as television and radio stations. "They need to disclose and publicly register and notice who’s buying ads for political purposes," she said.

Klobuchar said the exemption has become a far bigger problem over time, allowing foreign governments and bad actors to hide their efforts online -- even paying for ads in Russian rubles.

"I’m sure early on, in the early days of Facebook and Google, there weren’t a lot of these paid political ads. Well, now we’re at $1.4 billion," she said.

‘Light Touch’
Warner, of Virginia, said he hopes Facebook and other companies will back the bill, and he predicted that other Republicans will sign on after the Nov. 1 hearing.

GOP Senators Susan Collins of Maine, John Cornyn of Texas and Intelligence Committee Chairman Richard Burr of North Carolina have all said in interviews they want to wait for the hearing before deciding on legislation.

Senator Richard Blumenthal, a Connecticut Democrat, has said he is considering a push for even broader disclosure requirements by the social media companies. "This threat to democracy is with us now," he said. "It’s only going to expand. We have to muster a self-defense, just as we would a military or a cyberattack."

Several senators are also working on bills aimed at improving election security, including Democrat Martin Heinrich of New Mexico and Collins, both members of the Intelligence Committee.

Heinrich’s legislation is expected to propose funding and guidelines to protect voting systems and databases from cyberattacks. Republican Senator James Lankford of Oklahoma said in an interview he is working on his own proposal, and Democrat Ron Wyden of Oregon has pressed voting machine companies for information on their security practices.

States Targeted
Those efforts follow reports that Russia attempted to access 21 state voter databases.

"We’ve got to get it ready for 2018, so it is the right timing," Lankford said.

Bills requiring disclosure of shell companies’ owners may also get a boost from the concern over Russia’s actions.

Senator Sheldon Whitehouse, a Rhode Island Democrat, said testimony has shown that shell companies were "the lubricant for the election interference effort." Whitehouse has introduced a bill requiring disclosure of owners, co-sponsored by Judiciary Chairman Chuck Grassley, an Iowa Republican.

"Shell corporations help criminals hide the proceeds of their crimes, they help kleptocrats protect what they loot from their countries, but they also help facilitate Putin election interference," Whitehouse said, referring to Russian President Vladimir Putin.

A separate bill by Wyden and Marco Rubio of Florida would require disclosure of the owners of shell companies to states or to the Treasury Department.

— With assistance by Sarah Frier, and Selina Wang
 

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Senators Demand Online Ad Disclosures as Tech Lobby Mobilizes
By KENNETH P. VOGEL and CECILIA KANGOCT. 19, 2017

19dc-techlobby-1508365767076-superJumbo.jpg

Senator John McCain on Wednesday on Capitol Hill. Al Drago for The New York Times
WASHINGTON — Senator John McCain and two Democratic senators moved on Thursday to force Facebook, Google and other internet companies to disclose who is purchasing online political advertising, after revelations that Russian-linked operatives bought deceptive ads in the run-up to the 2016 election with no disclosure required.

But the tech industry, which has worked to thwart previous efforts to mandate such disclosure, is mobilizing an army of lobbyists and lawyers — including a senior adviser to Hillary Clinton’s campaign — to help shape proposed regulations. Long before the 2016 election, the adviser, Marc E. Elias, helped Facebook and Google request exemptions from the Federal Election Commission to existing disclosure rules, arguing that ads on the respective platforms were too small to fit disclaimers listing their sponsors.:ohhh:

Now Mr. Elias’s high-powered Democratic election law firm, Perkins Coie, is helping the companies navigate legal and regulatory issues arising from scrutiny of the Russian-linked ads, which critics say might have been flagged by the disclaimers. In a two-front war, tech companies are targeting an election commission rule-making process that was restarted last month and a legislative effort in the Senate.:wow:


“I’m not going to tell you they support this bill right now,” said Senator Amy Klobuchar, Democrat of Minnesota and the lead author of the proposed Honest Ads Act.

But she and her co-author, Senator Mark Warner, Democrat of Virginia, urged the social media firms to take greater responsibility for the content that lands on their sites, including political ads and other content meant to sow discord or chaos. With Facebook and Google alone capturing an estimated 85 percent of all digital political ads, self-policing won’t cut it, they said.

“They have to realize the world has change,” Ms. Klobuchar said.

Since 2006, most online political activity has been exempt from the rigorous regulations to which paid television, radio and print political advertising has been subject for years. The Federal Election Commission justified the so-called internet exemption rule by declaring the internet “a unique and evolving mode of mass communication and political speech that is distinct from other media in a manner that warrants a restrained regulatory approach.”

That attitude has many fewer adherents after the revelations that, in the run-up to the 2016 election, Facebook sold more than $100,000 worth of ads to a Russian company linked to the Kremlin, while Google sold at least $4,700 worth of ads to accounts believed to be connected to the Russian government.

Federal election law bars foreigners from spending money to attempt to influence United States elections.


“It’s ridiculous,” said Ann Ravel, a Democrat who served on the election commission from 2013 until this year. “We need to rethink all the exemptions for the internet because even if Facebook might not have known about the Russian advertising, they knew — and we all knew — that this was possible.”

The new bill would require internet companies to provide information to the election commission about who is paying for online ads.

The content and purchasers of the Russia-linked ads that ran on Facebook and Google in 2016 “are a mystery to the public because of outdated laws that have failed to keep up with evolving technology,” Ms. Klobuchar and Mr. Warner said.

The regulatory pressure comes at a particularly trying time for Google, Facebook and other tech giants. The companies, once celebrated as benevolent drivers of innovation and economic growth, are facing mounting criticism on both sides of the Atlantic for complex tax avoidance efforts, the hosting of pages used in sex trafficking, lax privacy protections and increasing monopoly power.

In response, they have ramped up lobbying and public relations campaigns, with Facebook’s chief operating officer, Sheryl Sandberg, last week whirring through Washington on an apology tour and charm offensive.

Yet government officials working on the investigations into the Russian-funded ads and the efforts to enact stricter disclosure requirements say Facebook and Google have been less than enthusiastic partners.

19dc-techlobby-superJumbo.jpg

Sheryl Sandberg, Facebook’s chief operating officer, back left, with Representative Tony Cárdenas, Democrat of California, last week in Washington. Drew Angerer/Getty Images
After initially resisting requests to turn over Russian-linked ads, Facebook has provided them to a congressional committee investigating Russian meddling in the 2016 election. But Google has yet to do so, and neither company has made the ads public.

And, in the weeks leading up to the introduction of the Klobuchar-Warner-McCain bill, Facebook told congressional aides that it is too difficult to figure out if an ad is political or commercial because candidates are often changing messages and topics. The company added that with the sheer number of ads on the site, the engineering involved in identifying political ads would be extremely challenging.

When the Federal Election Commission moved to strengthen its online disclaimer requirements in 2011 and again last year, the companies either ignored requests for input or suggested that new rules could “stand in the way of innovation,” as Facebook asserted in a 2011 comment to the commission.

Around that time, both companies paid Perkins Coie to seek exemptions from the election commission to one of the few election rules that does apply to online political activity — that political ads placed on third-party websites contain disclaimers revealing who paid for them. The exemption requests, written by Mr. Elias, the head of Perkins Coie’s political law practice, argued that it was impractical to require disclaimers on ads the size of those then being offered on Google and Facebook.


While the election commission approved Google’s request, which was submitted in 2010, by a four-to-two vote, it deadlocked three-to-three on Facebook’s request, which was submitted the next year. Facebook nonetheless proceeded as if it was exempt from the disclaimer requirement, declining to mandate that political advertisements on its platform list their sponsors.

Such disclaimers and other disclosure requirements might have helped deter the Russian-funded ads and other online efforts to meddle in the election, say advocates for stricter campaign finance rules. Mr. Elias went on to help lead research into Russian efforts to boost Donald J. Trump and damage Mrs. Clinton during the 2016 presidential campaign.

It was “kind of like the chickens coming home to roost,” said Ms. Ravel, the former commissioner.

She argued that, since Facebook was not granted an exemption to the disclaimer requirements, it should have required advertisements to include disclaimers for the past half-dozen years. But, referring to Mr. Elias, she said that “the savvy political insiders understand that there is not going to be any enforcement from the F.E.C.” because the commission has frequently deadlocked along partisan lines over enforcement matters in recent years.


Mr. Elias rejected suggestions that he helped Russia hurt Mrs. Clinton.

“Russia found a number of ways to aid Donald Trump and hurt Hillary Clinton, and the F.E.C. disclaimers would not have stopped them,” he said. The ads in question would not have triggered the disclaimers, he said, because — according to Facebook — they did not explicitly mention Mr. Trump, Mrs. Clinton or the election. In a blog post, Facebook wrote that the ads focused on amplifying “divisive social and political messages across the ideological spectrum — touching on topics from L.G.B.T. matters to race issues to immigration to gun rights.”

Citing United States intelligence findings that Russia was behind the hacking and dissemination of damaging emails from the Democratic National Committee in 2016, Mr. Elias said, “The Russians were willing to break the law to help Donald Trump. I doubt the F.E.C. disclaimers were going to be the straw that broke the camel’s back.”

Critics are not accepting that. Google and Facebook had ample opportunity to work with the Federal Election Commission to devise and implement effective and practical disclaimer rules, “but they were silent,” said Lawrence M. Noble, a former general counsel for the election commission who now serves in that position with the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics.

“And they are still trying to avoid regulation,” Mr. Noble said.

A Facebook official said that the company will submit comments to the election commission as it considers tightening its disclaimer rules.

And the company’s vice president for United States public policy, Erin Egan, said, “We look forward to continuing the conversation with lawmakers as we work toward a legislative solution” to “achieve transparency in political advertising.”

She pointed out that the company has enacted new policies to self-police its ads, which Facebook asserted in a company blog post “would have caught these malicious actors faster and prevented more improper ads from running” in 2016.

Riva Sciuto, a Google spokeswoman, said that strict ads policies, including limits on political-ad targeting and prohibitions on targeting based on race and religion, already exist at Google. But the company is “taking a deeper look to investigate attempts to abuse our systems, working with researchers and other companies, and will provide assistance to ongoing inquiries.”





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The only gripe I have with the honest ads act is that these politicians always use their power to protect them by creating laws, whereas regular citizens can’t do the same and have to depend on them.
regardless, this is huge news in the legitimization of social media and a turning point in the perception of the internet.
 
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