MCG17A11 S.L.C. 115TH CONGRESS 1ST SESSION S. ll To enhance transparency and accountability for online political advertisements by requiring those who purchase and publish such ads to disclose information about the advertisements to the public, and for other purposes. IN THE SENATE OF THE UNITED STATES llllllllll Ms. KLOBUCHAR (for herself, Mr. WARNER, and Mr. MCCAIN) introduced the following bill; which was read twice and referred to the Committee on llllllllll A BILL To enhance transparency and accountability for online political advertisements by requiring those who purchase and publish such ads to disclose information about the advertisements to the public, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 4 5 6 SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Honest Ads Act’’. SEC. 2. PURPOSE. The purpose of this Act is to enhance the integrity 7 of American democracy and national security by improving 8 disclosure requirements for online political advertisements MCG17A11 S.L.C. 2 1 in order to uphold the United States Supreme Court’s 2 well-established standard that the electorate bears the 3 right to be fully informed. 4 5 SEC. 3. FINDINGS. Congress makes the following findings: 6 (1) On January 6, 2017, the Office of the Di- 7 rector of National Intelligence published a report ti- 8 tled ‘‘Assessing Russian Activities and Intentions in 9 Recent U.S. Elections’’, noting that ‘‘Russian Presi- 10 dent Vladimir Putin ordered an influence campaign 11 in 2016 aimed at the US presidential election . . .’’. 12 Moscow’s influence campaign followed a Russian 13 messaging strategy that blends covert intelligence 14 operation—such as cyber activity—with overt efforts 15 by 16 media, third-party intermediaries, and paid social 17 media users or ‘‘trolls.’’ Russian Government agencies, state-funded 18 (2) On November 24, 2016, the Washington 19 Post reported findings from 2 teams of independent 20 researchers that concluded Russians ‘‘exploited 21 American-made technology platforms to attack U.S. 22 democracy at a particularly vulnerable moment . . . 23 as part of a broadly effective strategy of sowing dis- 24 trust in U.S. democracy and its leaders.’’. MCG17A11 S.L.C. 3 1 (3) Findings from a 2017 study on the manipu- 2 lation of public opinion through social media con- 3 ducted by the Computational Propaganda Research 4 Project at the Oxford Internet Institute found that 5 the Kremlin is using pro-Russian bots to manipulate 6 public discourse to a highly targeted audience. With 7 a sample of nearly 1,300,000 tweets, researchers 8 found that in the 2016 election’s 3 decisive states, 9 propaganda constituted 40 percent of the sampled 10 election-related tweets that went to Pennsylvanians, 11 34 percent to Michigan voters, and 30 percent to 12 those in Wisconsin. In other swing states, the figure 13 reached 42 percent in Missouri, 41 percent in Flor- 14 ida, 40 percent in North Carolina, 38 percent in 15 Colorado, and 35 percent in Ohio. 16 (4) On September 6, 2017, the nation’s largest 17 social media platform disclosed that between June 18 2015 and May 2017, Russian entities purchased 19 $100,000 in political advertisements, publishing 20 roughly 3,000 ads linked to fake accounts associated 21 with the Internet Research Agency, a pro-Kremlin 22 organization. According to the company, the ads 23 purchased focused ‘‘on amplifying divisive social and 24 political messages . . .’’. MCG17A11 S.L.C. 4 1 (5) In 2002, the Bipartisan Campaign Reform 2 Act became law, establishing disclosure requirements 3 for political advertisements distributed from a tele- 4 vision or radio broadcast station or provider of cable 5 or satellite television. In 2003, the Supreme Court 6 upheld regulations on electioneering communications 7 established under the Act, noting that such require- 8 ments ‘‘provide the electorate with information and 9 insure that the voters are fully informed about the 10 person or group who is speaking.’’. 11 (6) According to a study from Borrell Associ- 12 ates, in 2016, $1,415,000,000 was spent on online 13 advertising, more than quadruple the amount in 14 2012. 15 (7) The reach of a few large Internet plat- 16 forms—larger than any broadcast, satellite, or cable 17 provider—has greatly facilitated the scope and effec- 18 tiveness of disinformation campaigns. For instance, 19 the largest platform has over 210,000,000 Ameri- 20 cans users—over 160,000,000 of them on a daily 21 basis. By contrast, the largest cable television pro- 22 vider has 22,430,000 subscribers, while the largest 23 satellite television provider has 21,000,000 sub- 24 scribers. And the most-watched television broadcast 25 in U.S. history had 118,000,000 viewers. MCG17A11 S.L.C. 5 1 (8) The public nature of broadcast television, 2 radio, and satellite ensures a level of publicity for 3 any political advertisement. These communications 4 are accessible to the press, fact-checkers, and polit- 5 ical opponents; this creates strong disincentives for 6 a candidate to disseminate materially false, inflam- 7 matory, or contradictory messages to the public. So- 8 cial media platforms, in contrast, can target portions 9 of the electorate with direct, ephemeral advertise- 10 ments often on the basis of private information the 11 platform has on individuals, enabling political adver- 12 tisements that are contradictory, racially or socially 13 inflammatory, or materially false. 14 (9) According to comScore, 2 companies own 8 15 of the 10 most popular smartphone applications as 16 of June 2017, including the most popular social 17 media and email services—which deliver information 18 and news to users without requiring proactivity by 19 the user. Those same 2 companies accounted for 99 20 percent of revenue growth from digital advertising in 21 2016, including 77 percent of gross spending. 79 22 percent of online Americans—representing 68 per- 23 cent of all Americans—use the single largest social 24 network, while 66 percent of these users are most 25 likely to get their news from that site. MCG17A11 S.L.C. 6 1 (10) In its 2006 rulemaking, the Federal Elec- 2 tion Commission noted that only 18 percent of all 3 Americans cited the Internet as their leading source 4 of news about the 2004 presidential election; by con- 5 trast, the Pew Research Center found that 65 per- 6 cent of Americans identified an Internet-based 7 source as their leading source of information for the 8 2016 election. 9 (11) The Federal Election Commission, the 10 independent Federal agency charged with protecting 11 the integrity of the Federal campaign finance proc- 12 ess by providing transparency and administering 13 campaign finance laws, has failed to take action to 14 address online political advertisements. 15 (12) In testimony before the Senate Select 16 Committee on Intelligence titled, ‘‘Disinformation: A 17 Primer in Russian Active Measures and Influence 18 Campaigns,’’ multiple expert witnesses testified that 19 while the disinformation tactics of foreign adver- 20 saries have not necessarily changed, social media 21 services now provide ‘‘platform[s] practically pur- 22 pose-built for active measures[.]’’ Similarly, as Gen. 23 (RET) Keith B. Alexander, the former Director of 24 the National Security Agency, testified, during the 25 Cold War ‘‘if the Soviet Union sought to manipulate MCG17A11 S.L.C. 7 1 information flow, it would have to do so principally 2 through its own propaganda outlets or through ac- 3 tive measures that would generate specific news: 4 planting of leaflets, inciting of violence, creation of 5 other false materials and narratives. But the news 6 itself was hard to manipulate because it would have 7 required actual control of the organs of media, which 8 took long-term efforts to penetrate. Today, however, 9 because the clear majority of the information on so- 10 cial media sites is uncurated and there is a rapid 11 proliferation of information sources and other sites 12 that can reinforce information, there is an increasing 13 likelihood that the information available to average 14 consumers may be inaccurate (whether intentionally 15 or otherwise) and may be more easily manipulable 16 than in prior eras.’’. 17 (13) Current regulations on political advertise- 18 ments do not provide sufficient transparency to up- 19 hold the public’s right to be fully informed about po- 20 litical advertisements made online. 21 22 SEC. 4. SENSE OF CONGRESS. It is the sense of Congress that— 23 (1) the dramatic increase in digital political ad- 24 vertisements, and the growing centrality of online 25 platforms in the lives of Americans, requires the MCG17A11 S.L.C. 8 1 Congress and the Federal Election Commission to 2 take meaningful action to ensure that laws and reg- 3 ulations provide the accountability and transparency 4 that is fundamental to our democracy;. 5 (2) free and fair elections require both trans- 6 parency and accountability which give the public a 7 right to know the true sources of funding for polit- 8 ical advertisements in order to make informed polit- 9 ical choices and hold elected officials accountable; 10 and 11 (3) transparency of funding for political adver- 12 tisements is essential to enforce other campaign fi- 13 nance laws, including the prohibition on campaign 14 spending by foreign nationals. 15 SEC. 5. EXPANSION OF DEFINITION OF PUBLIC COMMU- 16 17 NICATION. (a) IN GENERAL.—Paragraph (22) of section 301 of 18 the Federal Election Campaign Act of 1971 (52 U.S.C. 19 30101(22)) is amended by striking ‘‘or satellite commu20 nication’’ and inserting ‘‘satellite, paid Internet, or paid 21 digital communication’’. 22 23 (b) TREATMENT TURES.—Section OF CONTRIBUTIONS EXPENDI- 301 of such Act (52 U.S.C. 30101) is 24 amended— 25 AND (1) in paragraph (8)(B)— MCG17A11 S.L.C. 9 1 (A) by striking ‘‘on broadcasting stations, 2 or in newspapers, magazines, or similar types of 3 general public political advertising’’ in clause 4 (v) and inserting ‘‘in any public communica- 5 tion’’; 6 (B) by striking ‘‘broadcasting, newspaper, 7 magazine, billboard, direct mail, or similar type 8 of general public communication or political ad- 9 vertising’’ in clause (ix)(1) and inserting ‘‘pub- 10 lic communication’’; and 11 (C) by striking ‘‘but not including the use 12 of broadcasting, newspapers, magazines, bill- 13 boards, direct mail, or similar types of general 14 public communication or political advertising’’ 15 in clause (x) and inserting ‘‘but not including 16 use in any public communication’’; and 17 (2) in paragraph (9)(B)— 18 19 (A) by striking clause (i) and inserting the following: 20 ‘‘(i) any news story, commentary, or 21 editorial distributed through the facilities 22 of any broadcasting station or any print, 23 online, or digital newspaper, magazine, 24 blog, publication, or periodical, unless such 25 broadcasting, print, online, or digital facili- MCG17A11 S.L.C. 10 1 ties are owned or controlled by any polit- 2 ical party, political committee, or can- 3 didate;’’; and. 4 (B) by striking ‘‘on broadcasting stations, 5 or in newspapers, magazines, or similar types of 6 general public political advertising’’ in clause 7 (iv) and inserting ‘‘in any public communica- 8 tion’’. 9 (c) DISCLOSURE AND DISCLAIMER STATEMENTS.— 10 Subsection (a) of section 318 of such Act (52 U.S.C. 11 30120) is amended— 12 (1) by striking ‘‘financing any communication 13 through any broadcasting station, newspaper, maga- 14 zine, outdoor advertising facility, mailing, or any 15 other type of general public political advertising’’ 16 and inserting ‘‘financing any public communication’’; 17 and 18 (2) by striking ‘‘solicits any contribution 19 through any broadcasting station, newspaper, maga- 20 zine, outdoor advertising facility, mailing, or any 21 other type of general public political advertising’’ 22 and inserting ‘‘solicits any contribution through any 23 public communication’’. MCG17A11 S.L.C. 11 1 SEC. 6. EXPANSION OF DEFINITION OF ELECTIONEERING 2 3 4 5 COMMUNICATION. (a) EXPANSION TO ONLINE COMMUNICATIONS.— (1) APPLICATION TO QUALIFIED INTERNET AND DIGITAL COMMUNICATIONS.— 6 (A) IN GENERAL.—Subparagraph (A) of 7 section 304(f)(3) of the Federal Election Cam- 8 paign Act of 1971 (52 U.S.C. 30104(f)(3)(A)) 9 is amended by striking ‘‘or satellite communica- 10 tion’’ each place it appears in clauses (i) and 11 (ii) and inserting ‘‘satellite, or qualified Inter- 12 net or digital communication’’. 13 (B) QUALIFIED INTERNET OR DIGITAL 14 COMMUNICATION.—Paragraph 15 304(f) of such Act (52 U.S.C. 30104(f)) is 16 amended by adding at the end the following 17 new subparagraph: 18 ‘‘(D) QUALIFIED (3) of section INTERNET OR DIGITAL 19 COMMUNICATION.—The 20 or digital communication’ means any commu- 21 nication which is placed or promoted for a fee 22 on an online platform (as defined in subsection 23 (j)(3)).’’. 24 (2) NONAPPLICATION 25 TORATE 26 304(f)(3)(A)(i)(III) TO ONLINE of term ‘qualified Internet OF RELEVANT ELEC- COMMUNICATIONS.—Section such Act (52 U.S.C. MCG17A11 S.L.C. 12 1 30104(f)(3)(A)(i)(III)) is amended by inserting ‘‘any 2 broadcast, cable, or satellite’’ before ‘‘communica- 3 tion’’. 4 (3) NEWS EXEMPTION.—Section 5 304(f)(3)(B)(i) 6 30104(f)(3)(B)(i)) is amended to read as follows: of such Act (52 U.S.C. 7 ‘‘(i) a communication appearing in a 8 news story, commentary, or editorial dis- 9 tributed through the facilities of any 10 broadcasting station or any online or dig- 11 ital newspaper, magazine, blog, publica- 12 tion, or periodical, unless such broad- 13 casting, online, or digital facilities are 14 owned or controlled by any political party, 15 political committee, or candidate;’’. 16 (b) EFFECTIVE DATE.—The amendments made by 17 this section shall apply with respect to communications 18 made on or after January 1, 2018. 19 SEC. 7. APPLICATION OF DISCLAIMER STATEMENTS TO ON- 20 21 22 LINE COMMUNICATIONS. (a) CLEAR AND MENT.—Subsection CONSPICUOUS MANNER REQUIRE- (a) of section 318 of the Federal Elec- 23 tion Campaign Act of 1971 (52 U.S.C. 30120(a)) is 24 amended— MCG17A11 S.L.C. 13 1 (1) by striking ‘‘shall clearly state’’ each place 2 it appears in paragraphs (1), (2), and (3) and in- 3 serting ‘‘shall state in a clear and conspicuous man- 4 ner’’, and 5 (2) by adding at the end the following flush 6 sentence: ‘‘For purposes of this subsection, a com- 7 munication does not make a statement in a clear 8 and conspicuous manner if it is difficult to read or 9 hear or if the placement is easily overlooked.’’. 10 (b) SPECIAL RULES FOR QUALIFIED INTERNET OR 11 DIGITAL COMMUNICATIONS.— 12 (1) IN GENERAL.—Section 318 of such Act (52 13 U.S.C. 30120) is amended by adding at the end the 14 following new subsection: 15 ‘‘(e) SPECIAL RULES FOR QUALIFIED INTERNET OR 16 DIGITAL COMMUNICATIONS.— 17 ‘‘(1) SPECIAL RULES WITH RESPECT TO STATE- 18 MENTS.—In 19 digital 20 304(f)(3)(D)) which is disseminated through a me- 21 dium in which the provision of all of the information 22 specified in this section is not possible, the commu- 23 nication shall, in a clear and conspicuous manner— 24 ‘‘(A) state the name of the person who 25 the case of any qualified Internet or communication (as defined paid for the communication; and in section MCG17A11 S.L.C. 14 1 ‘‘(B) provide a means for the recipient of 2 the communication to obtain the remainder of 3 the information required under this section with 4 minimal effort and without receiving or viewing 5 any additional material other than such re- 6 quired information. 7 ‘‘(2) SAFE HARBOR FOR DETERMINING CLEAR 8 AND 9 qualified Internet or digital communication (as de- 10 fined in section 304(f)(3)(D)) shall be considered to 11 be made in a clear and conspicuous manner as pro- 12 vided in subsection (a) if the communication meets 13 the following requirements: 14 CONSPICUOUS MANNER.—A ‘‘(A) TEXT OR statement in a GRAPHIC 15 TIONS.—In 16 munication, the statement— COMMUNICA- the case of a text or graphic com- 17 ‘‘(i) appears in letters at least as large 18 as the majority of the text in the commu- 19 nication; and 20 ‘‘(ii) meets the requirements of para- 21 graphs (2) and (3) of subsection (c). 22 ‘‘(B) AUDIO COMMUNICATIONS.—In the 23 case of an audio communication, the statement 24 is spoken in a clearly audible and intelligible MCG17A11 S.L.C. 15 1 manner at the beginning or end of the commu- 2 nication and lasts at least 3 seconds. 3 ‘‘(C) VIDEO COMMUNICATIONS.—In the 4 case of a video communication which also in- 5 cludes audio, the statement— 6 7 ‘‘(i) is included at either the beginning or the end of the communication; and 8 ‘‘(ii) is made both in— 9 ‘‘(I) a written format that meets 10 the requirements of subparagraph (A) 11 and appears for at least 4 seconds; 12 and 13 ‘‘(II) an audible format that 14 meets the requirements of subpara- 15 graph (B). 16 ‘‘(D) OTHER COMMUNICATIONS.—In the 17 case of any other type of communication, the 18 statement is at least as clear and conspicuous 19 as the statement specified in subparagraphs 20 (A), (B), or (C).’’. 21 (2) NONAPPLICATION OF CERTAIN EXCEP- 22 TIONS.—The 23 110.11(f)(1)(i) and (ii) of title 11, Code of Federal 24 Regulations, or any successor to such rules, shall 25 have no application to qualified Internet or digital exceptions provided in section MCG17A11 S.L.C. 16 1 communications (as defined in section 304(f)(3)(D) 2 of the Federal Election Campaign Act of 1971). 3 (c) MODIFICATION 4 FOR OF ADDITIONAL REQUIREMENTS CERTAIN COMMUNICATIONS.—Section 318(d) of such 5 Act (52 U.S.C. 30120(d)) is amended— 6 (1) in paragraph (1)(A)— 7 (A) by striking ‘‘which is transmitted 8 through radio’’ and inserting ‘‘which is in an 9 audio format’’; and 10 (B) by striking ‘‘BY RADIO’’ 11 and inserting ‘‘AUDIO 12 (2) in paragraph (1)(B)— in the heading FORMAT’’; 13 (A) by striking ‘‘which is transmitted 14 through television’’ and inserting ‘‘which is in 15 video format’’; and 16 (B) by striking ‘‘BY 17 heading and inserting ‘‘VIDEO 18 (3) in paragraph (2)— TELEVISION’’ FORMAT’’; in the and 19 (A) by striking ‘‘transmitted through radio 20 or television’’ and inserting ‘‘made in audio or 21 video format’’; and 22 (B) by striking ‘‘through television’’ in the 23 second sentence and inserting ‘‘in video for- 24 mat’’. MCG17A11 S.L.C. 17 1 SEC. 8. POLITICAL RECORD REQUIREMENTS FOR ADVER- 2 TISING ON ONLINE PLATFORMS. 3 (a) IN GENERAL.—Section 304 of the Federal Elec- 4 tion Campaign Act of 1971 (52 U.S.C. 30104) is amended 5 by adding at the end the following new subsection: 6 7 8 9 ‘‘(j) DISCLOSURE OF CERTAIN ONLINE ADVERTISE- MENTS.— ‘‘(1) IN GENERAL.— ‘‘(A) REQUIREMENTS FOR ONLINE PLAT- 10 FORMS.—An 11 and make available for online public inspection 12 in machine readable format, a complete record 13 of any request to purchase on such online plat- 14 form a qualified political advertisement which is 15 made by a person whose aggregate requests to 16 purchase qualified political advertisements on 17 such online platform during the preceding 12 18 months exceeds $500. online platform shall maintain, 19 ‘‘(B) 20 TISERS.—Any 21 a qualified political advertisement on an online 22 platform shall provide the online platform with 23 such information as is necessary for the online 24 platform to comply with the requirements of 25 subparagraph (A). REQUIREMENTS FOR ADVER- person who requests to purchase MCG17A11 S.L.C. 18 1 2 3 4 ‘‘(2) CONTENTS OF RECORD.—A record main- tained under paragraph (1)(A) shall contain— ‘‘(A) a digital copy of the qualified political advertisement; 5 ‘‘(B) a description of the audience targeted 6 by the advertisement, the number of views gen- 7 erated from the advertisement, and the date 8 and time that the advertisement is first dis- 9 played and last displayed; and 10 11 12 ‘‘(C) information regarding— ‘‘(i) the average rate charged for the advertisement; 13 ‘‘(ii) the name of the candidate to 14 which the advertisement refers and the of- 15 fice to which the candidate is seeking elec- 16 tion, the election to which the advertise- 17 ment refers, or the national legislative 18 issue to which the advertisement refers (as 19 applicable); 20 ‘‘(iii) in the case of a request made 21 by, or on behalf of, a candidate, the name 22 of the candidate, the authorized committee 23 of the candidate, and the treasurer of such 24 committee; and MCG17A11 S.L.C. 19 1 ‘‘(iv) in the case of any request not 2 described in clause (iii), the name of the 3 person purchasing the advertisement, the 4 name, address, and phone number of a 5 contact person for such person, and a list 6 of the chief executive officers or members 7 of the executive committee or of the board 8 of directors of such person. 9 ‘‘(3) ONLINE PLATFORM.—For purposes of this 10 subsection, the term ‘online platform’ means any 11 public-facing website, Web application, or digital ap- 12 plication (including a social network, ad network, or 13 search engine) which— 14 15 ‘‘(A) sells qualified political advertisements; and 16 ‘‘(B) has 50,000,000 or more unique 17 monthly United States visitors or users for a 18 majority of months during the preceding 12 19 months. 20 ‘‘(4) QUALIFIED 21 ‘‘(A) IN POLITICAL ADVERTISEMENT.— GENERAL.—For purposes of this 22 subsection, the term ‘qualified political adver- 23 tisement’ means any advertisement (including 24 search engine marketing, display advertise- MCG17A11 S.L.C. 20 1 ments, video advertisements, native advertise- 2 ments, and sponsorships) that— 3 ‘‘(i) is made by or on behalf of a can- 4 didate; or 5 ‘‘(ii) communicates a message relating 6 to any political matter of national impor- 7 tance, including— 8 ‘‘(I) a candidate; 9 ‘‘(II) any election to Federal of- 10 fice; or 11 ‘‘(III) a national legislative issue 12 13 of public importance ‘‘(5) TIME TO MAINTAIN FILE.—The informa- 14 tion required under this subsection shall be made 15 available as soon as possible and shall be retained by 16 the online platform for a period of not less than 4 17 years. 18 ‘‘(6) PENALTIES.—For penalties for failure by 19 online platforms, and persons requesting to purchase 20 a qualified political advertisement on online plat- 21 forms, to comply with the requirements of this sub- 22 section, see section 309.’’. 23 (b) RULEMAKING.—Not later than 90 days after the 24 date of the enactment of this Act, the Federal Election 25 Commission shall establish rules— MCG17A11 S.L.C. 21 1 (1) requiring common data formats for the 2 record required to be maintained under section 3 304(j) of the Federal Election Campaign Act of 4 1971 (as added by subsection (a)) so that all online 5 platforms submit and maintain data online in a com- 6 mon, machine-readable and publicly accessible for- 7 mat; and 8 (2) establishing search interface requirements 9 relating to such record, including searches by can- 10 didate name, issue, purchaser, and date. 11 (c) REPORTING.—Not later than 2 years after the 12 date of the enactment of this Act, and biannually there13 after, the Chairman of the Federal Election Commission 14 shall submit a report to Congress on— 15 (1) matters relating to compliance with and the 16 enforcement of the requirements of section 304(j) of 17 the Federal Election Campaign Act of 1971, as 18 added by subsection (a); 19 (2) recommendations for any modifications to 20 such section to assist in carrying out its purposes; 21 and 22 (3) identifying ways to bring transparency and 23 accountability to political advertisements distributed 24 online for free. MCG17A11 S.L.C. 22 1 SEC. 9. PREVENTING CONTRIBUTIONS, EXPENDITURES, 2 INDEPENDENT 3 BURSEMENTS FOR ELECTIONEERING COM- 4 MUNICATIONS BY FOREIGN NATIONALS IN 5 THE FORM OF ONLINE ADVERTISING. 6 Section 319 of the Federal Election Campaign Act EXPENDITURES, AND DIS- 7 of 1971 (52 U.S.C. 30121) is amended by adding at the 8 end the following new subsection: 9 ‘‘(c) Each television or radio broadcast station, pro- 10 vider of cable or satellite television, or online platform (as 11 defined in section 304(j)(3)) shall make reasonable efforts 12 to ensure that communications described in section 318(a) 13 and made available by such station, provider, or platform 14 are not purchased by a foreign national, directly or indi15 rectly.’’.