SPOT Spotify Technology SA

By Patience Haggin 

Spotify Technology SA said it would stop selling political advertising in early 2020 because it lacks the appropriate tools to review them, a move that comes as many digital platforms selling such ads face growing criticism for helping spread misinformation.

"At this point in time, we do not yet have the necessary level of robustness in our processes, systems and tools to responsibly validate and review this content. We will reassess this decision as we continue to evolve our capabilities," a Spotify spokeswoman said.

The spokeswoman declined to say what review process the digital music service implemented for political ads in the 2016 and 2018 election cycles, and declined to specify whether the move was motivated by concerns about foreign meddling.

Spotify opened a political-advertising department in mid-2016, former Spotify employees said. Executives had previously been concerned that political ads could bother Spotify's listeners and lead to negative feedback, one of the people said. Spotify required its employees to manually monitor the "creative," or details, of the political ads before they ran, the person said.

Spotify's decision comes shortly after companies with larger digital-ad businesses have announced changes to the way they vet political ads. In October, Twitter Inc. said it would stop selling political ads, and weeks later Alphabet Inc.-owned Google said it would limit political-ad buyers' ability to target their audiences.

Facebook Inc. in October said it won't fact-check ads run by politicians, but the company has since weighed further changes to its political-advertising policy, including its own restrictions on targeting users.

Spending on political ads increasingly is shifting online -- where groups can target narrow slices of voters and regulators have little oversight. Digital political-ad spending is expected to reach $2.9 billion in 2020, more than doubling from $1.4 billion in 2016, according to Borrell Associates Inc., a consulting firm.

Watchdogs, including lawmakers, technology executives and advocacy groups, have called for greater transparency in political ads following revelations that Russian entities purchased digital ads designed to influence the 2016 U.S. vote, including a coordinated effort to spread misinformation.

"Companies are trying to grapple with the fact that ads can be used to spread misinformation," said Katherine Haenschen, an assistant professor at Virginia Tech who studies digital advertising on tech platforms. "For a little bit of money, you can lie to a lot of people."

Prof. Haenschen said the most effective way to stop misinformation is not run untrue political ads, but that puts companies in the position of having to decide what is true and what isn't. "So they sidestep the question by just saying 'no political ads.' "

A person familiar with Spotify's policy said the company defines political ads as those purchased by, or that advocate for or against, candidates for office, elected officials, appointed officials, political parties, political action committees, super PACs and nonprofits operated to promote social welfare, known as 501c4 organizations. It also applies to ads that advocate for or against legislative or judicial outcomes.

Much like Twitter's policy, Spotify's move appears to leave the door open to "issue ads," or messages designed to influence opinion on a political or social matter, but that don't advocate for an electoral outcome, Prof. Haenschen said.

Political ads, which Spotify sells only in the U.S., haven't been a significant revenue stream for the company, people familiar with the matter said.

Spotify's move will cut off what was already a narrow channel for major political campaigns. Presidential hopeful Sen. Elizabeth Warren, for example, spent about $44,000 on Spotify ads in the first three quarters of 2019, according to filings with the Federal Election Commission. She reported spending more than $2.8 million on Facebook during the same period.

Pete Buttigieg's presidential campaign said it has advertised on Spotify. So have the Democratic Congressional Campaign Committee and Nebraska Sen. Ben Sasse, according to FEC filings. Sen. Bernie Sanders, who is running in the Democratic presidential primaries, and the Republican National Committee have also purchased ads on Spotify, said the person familiar with the company.

--Emily Glazer contributed to this article.

Write to Patience Haggin at patience.haggin@wsj.com

(END) Dow Jones Newswires

December 27, 2019 16:31 ET (21:31 GMT)

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