U.S. Regulation Governing Digital Political Ads Is Broken

Dr. J. Scott Babwah Brennen is head of online expression policy at the Center on Technology Policy at UNC-Chapel Hill. Matt Perault is the director of the Center on Technology Policy, a professor of the practice at UNC’s School of Information and Library Science, and a consultant on technology policy issues at Open Water Strategies.

Along with pumpkin spice, sweaters, and skeletons, fall in the United States has long meant political ads saturating our TVs, radios, billboards, and neighbors’ yards. Increasingly, those ads are also overrunning our digital lives: popping up across our social media feeds, streaming services, and even screens at our gas pumps.

As advertisers spend billions of dollars on digital political ads this election, digital platforms have been criticized for hosting ads that contain misinformation, for taking ad dollars from shady organizations, and for censoring ads based on an advertiser’s political opinions.

However, the regulations governing digital political ads remain outdated, incomplete, and weak. In the 2020 election cycle, some platforms resorted to dramatic tactics to try to curb abuse and misinformation; others shut down political ads entirely. Yet, as we race toward the final days of the 2022 midterm elections, we have learned little about the impact of those interventions, and we have made remarkably little progress in deciding how best to govern digital political ads.

Based on what we know right now, what should governments and ad platforms do to improve the health of digital political ads? While there are no easy fixes, governments and ad platforms can take meaningful steps to improve paid political speech online.

Platforms and governments should provide better data and smarter transparency. Doing so would help the public to be better informed, allow journalists and regulators to monitor campaigns and advertisers, and permit researchers to uncover deeper trends.

Toward this end, the FEC should revise its rules regarding reporting requirements. While political committees must report how they spend money to the FEC, they do not need to report how ad agencies spend money on their behalf. We estimated that 94% of federal ad spending in the 2020 election went through ad agencies, hiding important ad spend data from public view.

Similarly, the federal government should host a national archive of digital political ads, and should require political advertisers to report all ads to it. A national ad archive could help the public make informed decisions about candidates, and could help journalists, researchers, and regulators monitor elections in real time.

Better data, however, will be meaningless if it is not incorporated into platform policies and government regulation. Yet there remain significant challenges to integrating empirical evidence into ad governance. The FEC is a regulatory body plagued by stagnation — its 6-commissioner composition was designed for inertia. Congress has struggled to pass legislation regulating online ads or modernizing election governance. And companies have been focused on minimizing risk, with some platforms exiting the political ads business entirely because they are willing to forgo potential ad revenue if it helps them to avoid bad press and steep compliance costs. Other platforms have been hesitant to provide internal data on the performance of various interventions, wary that transparency will expose them to public criticism.

For example, we found that Meta’s ban of new ads in the last week of the 2020 election likely disproportionately hurt smaller, poorer, and Democratic campaigns, without having a meaningful effect on curbing misinformation. However, the company recently announced it would implement the same policy in the upcoming election without providing any data on the success or failure of its actions in 2020. It’s possible our assessment missed key factors and reached the wrong conclusion, but if so, it would be useful to see the countervailing evidence.

Because political ads can enrich public debate, more platforms should permit political ads, and regulation should be designed to facilitate competition by making it possible for smaller platforms to host political ads. Regulation imposing steep compliance costs will impose a disproportionate burden on smaller companies.

But there should be some guardrails. Platforms should have explicit, detailed policies that are rigorously tested and consistently enforced. Policies should be announced far enough in advance that advertisers can plan accordingly. Platforms should invest in helping smaller advertisers navigate their policies.

Platforms should not exempt ads from a platform’s terms of service. Paying for content should not entitle advertisers to special treatment. At the same time, the boundary between organic and paid content isn’t always so clear: paid influencer content has continued on platforms that do not permit more traditional forms of political advertising. Paying influencers should not be a way to circumvent ad policies.

Likewise, federal law should prohibit falsehoods about the time, place, and manner of elections meant to suppress voting. Such misinformation directly interferes with the democratic process. Criminalizing these types of deceptive practices would also enable platforms to be held liable in cases where they violate it, since platform immunity does not extend to violations of federal criminal law. In the absence of new law, such as the For the People Act (H.R. 1), platforms should enact and enforce strict prohibitions on this content.

The challenge of regulating paid political speech is to balance the rights of advertisers to speak with the right of the public to hear. Better understanding of political ads will improve how they are governed, and improved governance will help ensure that paid political speech works in the service of our democracy.