TWTR Twitter Inc

By Deepa Seetharaman and Byron Tau 

Facebook Inc. is suddenly in the crosshairs of lawmakers pushing to crack down on exemptions that allow social-media companies to operate beyond the norms of political campaigns.

Congressional leaders and other groups are starting to discuss legislation that would require social-media companies to create a public disclosure portal of political ads shown on their platforms, similar to the requirements of television and radio stations. The increased scrutiny follows Facebook's disclosure in September that Russian entities spent a total of $150,000 to buy more than 5,200 ads with divisive political messages during the U.S. presidential campaign.

Separately, Democrats are pushing the Federal Election Commission to create new rules that would curb the ability of foreigners to spend money on political advertising.

On Wednesday, 20 congressional Democrats encouraged the FEC to "take immediate steps to understand the threats posed to our democratic process by foreign influenced internet and social media advertisement."

"We're open to reviewing any specific congressional proposals," a Facebook spokesman said. "We are looking into more ways to address ad transparency on our platform," he added.

A Twitter spokeswoman said company officials would meet Senate staffers next week to discuss the 2016 election. "Twitter engages with governments around the world on public policy issues of importance and of interest to policy makers," she said.

Tech firms such as Facebook and Twitter Inc. are subject to looser disclosure requirements than traditional media, such as television and radio stations, which must publicly disclose campaign ads they broadcast.

Facebook removed hundreds of Russian accounts that purchased the ads, resulting in the deletion of some ads.

Video advertisements that appear on social media also aren't bound by the "Stand By Your Ad" provision requiring candidates in their own voice to take responsibility for the ads their campaigns run -- usually in the form of a candidate "approving this message."

Facebook briefed Senate and House staffers earlier in September on the Russian ads, showing half a dozen ads to the groups before retrieving all the material in the presentation, people familiar with the meetings said. Facebook shared more detailed records with Special Counsel Robert Mueller, including copies of the ads, details of the accounts and targeting criteria, according to people familiar with the matter.

Holding social media to the same standard as broadcasters wouldn't necessarily have stopped Russian ads from appearing on Facebook, experts say, because most of the ads paid for by Russian entities didn't mention the election, voting or either candidate.

For instance, one ad promoting an anti-immigration rally in Idaho in August 2016 railed against "Obama's treacherous immigration policy and further resettlement of refugees from Muslim countries." The ad didn't directly address the issue of immigration within the context of the campaign. (The rally was canceled on Facebook.)

"It's going to be hard to regulate in this area," said Nate Persily, a Stanford professor who studies election law. "But it's clearly the frontier."

The last time campaign-finance laws were broadly overhauled was in 2002, long before the rise of social media, online fundraising and other hallmarks of modern political campaigns. As a result, most of the regulations are designed for the radio and television era.

"Traditional brick-and-mortar platforms like radio and television don't have the same protections that the internet companies do," said Albert Gidari, director of privacy at Stanford Law School's Center for Internet & Society.

Social media also makes it easier for campaigns to raise money from small donors. Under federal law, small donations under $200 don't need to be reported in public filings.

Wednesday's letter from Democrats to the FEC, organized by Sen. Martin Heinrich (D., N.M.), Rep. John Sarbanes (D., Md.) and Rep. John Conyers (D., Mich.), also sought "new guidance on how advertising platforms can better prevent foreign nationals from illicitly spending in future U.S. elections." It is unclear whether foreigners used social media to make political donations.

Top Democrats on the Senate Rules Committee and the Senate Intelligence Committee are behind the effort to impose equal disclosure requirements on social-media ad purchases that the Federal Communications Commission imposes on broadcasters.

Though discussions are preliminary, one proposal would require social-media companies to establish a public repository of political advertisements on their platforms, according to Democratic aides familiar with the deliberations. Hill Democrats are also considering whether to make the companies disclose the targeting criteria that political organizations are using to reach voters with each ad, aides said.

Ad buying on Facebook is done on a self-service platform where the advertiser can target small, specific groups of users.

Rebecca Ballhaus contributed to this article.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com and Byron Tau at byron.tau@wsj.com

(END) Dow Jones Newswires

September 21, 2017 05:44 ET (09:44 GMT)

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