Facebook fought for years to avoid political ad disclosure rules

Facebook is pledging greater transparency about who's behind election-related ads online. For years, the company fought to avoid it.

Since 2011, Facebook has asked the Federal Election Commission for blanket exemptions from political advertising disclosure rules — transparency that could have helped it avoid the current crisis over Russian ad spending ahead of the 2016 U.S. election.

Communications law requires traditional media like TV and radio to track and disclose political ad buyers. The rule doesn't apply online, an exemption that has helped Facebook's self-serve advertising business generate hundreds of millions of dollars in political campaign spots. When the company was smaller, the issue was debated in some policy corners of Washington. Now that the social network is such a powerful political tool, with more than 2 billion users, the topic is at the center of a debate about the future of American democracy.

Back in 2011, Facebook argued for the exemption for the same reasons as internet search giant Google: its ads are too small and have a character limit, leaving no room for language saying who paid for a campaign, according to documents on the FEC's website. Some FEC commissioners agreed, while others argued that Facebook could provide a clickable web link to get more information about the ad.

Facebook wouldn't budge. It warned that FEC proposals for more political ad disclosure could hinder free speech in a 2011 opinion written by Marc Elias, a high-powered Democratic lawyer who later became general counsel for Hillary Clinton's 2016 campaign. Colin Stretch, a top Facebook lawyer, said the agency "should not stand in the way of innovation," and warned that such rules would quickly become obsolete.

When it came time for the FEC to decide in June 2011, the agency's six commissioners split on a 3-3 vote. Facebook didn't get its exemption, so an advertiser using its platform was still subject to a 2006 ruling by the FEC requiring disclosure. But the company allowed ads to run without those disclaimers, leaving it up to ad buyers to comply.

"Facebook just did not help," said Adav Noti, senior director of trial litigation and strategy at the Campaign Legal Center, who was an in-house lawyer at the FEC at the time. "They weren't taking a middle ground, they just thought nothing they did should be subject to the disclaimer requirements."

Last month, after discovering that accounts affiliated with Russia spent $100,000 on politically divisive ads ahead of the U.S. election, Facebook CEO Mark Zuckerberg announced an overhaul of the company's political advertising system. Zuckerberg promised to "bring Facebook to an even higher standard of transparency" than television and other media, by making it possible to click on an advertiser and see what they were touting to other audiences.

Current rules require disclaimers for ads on TV and radio that are intended to influence elections by advocating for or against specific candidates. Most of the Russia-linked ads on Facebook focused on divisive issues such as immigration and race relations, rather than candidates. The company this week presented the ads to Congress and said it would hire 1,000 employees to a global review team to take down ads that don't meet its rules.

Facebook's fight to remain exempt from government rules shows how focused the company has been on the growth of its business — at least until a public crisis occurs. Now it's at the center of investigations into whether there were any links between Russia's activity and President Donald Trump's election campaign. There's also a bill coming from Democrats that would require public disclosure of online political ads, and Senate leaders are set to hold a news conference Wednesday to update the public on their probe.

"Current FEC regulations aren't sufficient to address online political advertisements," said Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, which is investigating potential Russian meddling in the U.S. election. He's working with Sen. Amy Klobuchar of Minnesota on the bill.

In a rare act of unanimity, all current FEC commissioners voted Tuesday to reopen public comments about the Facebook disclaimer rule. This time, it will be difficult for Facebook to argue it should be exempt, according to Noti.

"The fact that Facebook took the hard-line position that they should be exempt from disclosure while this activity was going on doesn't reflect well on Facebook," he said. "They would do well to adopt a more constructive position in terms of furthering the public interest to know who's paying for this advertising."

The FEC declined to comment. Facebook hasn't decided whether it will submit a new comment to the agency, according to a company spokesman.

Either way, the FEC hasn't been able to agree internally on what the digital rules should be, meaning that if regulation does occur, it may happen through Congress instead. The FEC is usually composed of six commissioners, no more than three of whom can come from the same party, so it is often deadlocked along partisan lines. Ideological differences among members stymie rule-making and enforcement, according to Michael Beckel, research manager at Issue One, a nonpartisan group that has proposed reforms for the agency.

"Gridlock and dysfunction are part of the norm," he said. "It's a very slow-going process to get consensus on anything."