Title: Honest Ads Act
Policy area: Government Operations and Politics

Summary:
Honest Ads Act
This bill expands source disclosure requirements for political advertisements by (1) establishing that paid internet and paid digital communications may qualify as “public communications” or “electioneering communications” that may be subject to such requirements, and (2) imposing additional requirements relating to the form of such source disclosures and the information contained within. The bill also requires certain online platform companies to maintain publicly available records about qualified political advertisements that have been purchased on their platforms.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4077 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 4077

    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 HOUSE OF REPRESENTATIVES

                            October 19, 2017

Mr. Kilmer (for himself and Mr. Coffman) introduced the following bill; 
      which was referred to the Committee on House Administration

_______________________________________________________________________

                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

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 of American 
democracy and national security by improving disclosure requirements 
for online political advertisements in order to uphold the United 
States Supreme Court's well-established standard that the electorate 
bears the right to be fully informed.

SEC. 3. FINDINGS.

    Congress makes the following findings:
            (1) On January 6, 2017, the Office of the Director of 
        National Intelligence published a report titled ``Assessing 
        Russian Activities and Intentions in Recent U.S. Elections'', 
        noting that ``Russian President Vladimir Putin ordered an 
        influence campaign in 2016 aimed at the U.S. Presidential 
        election . . .''. Moscow's influence campaign followed a 
        Russian messaging strategy that blends covert intelligence 
        operation--such as cyber activity--with overt efforts by 
        Russian Government agencies, State-funded media, third-party 
        intermediaries, and paid social media users or ``trolls.''
            (2) On November 24, 2016, the Washington Post reported 
        findings from 2 teams of independent researchers that concluded 
        Russians ``exploited American-made technology platforms to 
        attack U.S. democracy at a particularly vulnerable moment . . . 
        as part of a broadly effective strategy of sowing distrust in 
        U.S. democracy and its leaders.''.
            (3) Findings from a 2017 study on the manipulation of 
        public opinion through social media conducted by the 
        Computational Propaganda Research Project at the Oxford 
        Internet Institute found that the Kremlin is using pro-Russian 
        bots to manipulate public discourse to a highly targeted 
        audience. With a sample of nearly 1,300,000 tweets, researchers 
        found that in the 2016 election's 3 decisive States, propaganda 
        constituted 40 percent of the sampled election-related tweets 
        that went to Pennsylvanians, 34 percent to Michigan voters, and 
        30 percent to those in Wisconsin. In other swing States, the 
        figure reached 42 percent in Missouri, 41 percent in Florida, 
        40 percent in North Carolina, 38 percent in Colorado, and 35 
        percent in Ohio.
            (4) On September 6, 2017, the Nation's largest social media 
        platform disclosed that between June 2015 and May 2017, Russian 
        entities purchased $100,000 in political advertisements, 
        publishing roughly 3,000 ads linked to fake accounts associated 
        with the Internet Research Agency, a pro-Kremlin organization. 
        According to the company, the ads purchased focused ``on 
        amplifying divisive social and political messages . . .''.
            (5) In 2002, the Bipartisan Campaign Reform Act became law, 
        establishing disclosure requirements for political 
        advertisements distributed from a television or radio broadcast 
        station or provider of cable or satellite television. In 2003, 
        the Supreme Court upheld regulations on electioneering 
        communications established under the Act, noting that such 
        requirements ``provide the electorate with information and 
        insure that the voters are fully informed about the person or 
        group who is speaking.''.
            (6) According to a study from Borrell Associates, in 2016, 
        $1,415,000,000 was spent on online advertising, more than 
        quadruple the amount in 2012.
            (7) The reach of a few large internet platforms--larger 
        than any broadcast, satellite, or cable provider--has greatly 
        facilitated the scope and effectiveness of disinformation 
        campaigns. For instance, the largest platform has over 
        210,000,000 American users--over 160,000,000 of them on a daily 
        basis. By contrast, the largest cable television provider has 
        22,430,000 subscribers, while the largest satellite television 
        provider has 21,000,000 subscribers. And the most-watched 
        television broadcast in U.S. history had 118,000,000 viewers.
            (8) The public nature of broadcast television, radio, and 
        satellite ensures a level of publicity for any political 
        advertisement. These communications are accessible to the 
        press, fact-checkers, and political opponents; this creates 
        strong disincentives for a candidate to disseminate materially 
        false, inflammatory, or contradictory messages to the public. 
        Social media platforms, in contrast, can target portions of the 
        electorate with direct, ephemeral advertisements often on the 
        basis of private information the platform has on individuals, 
        enabling political advertisements that are contradictory, 
        racially or socially inflammatory, or materially false.
            (9) According to comScore, 2 companies own 8 of the 10 most 
        popular smartphone applications as of June 2017, including the 
        most popular social media and email services--which deliver 
        information and news to users without requiring proactivity by 
        the user. Those same 2 companies accounted for 99 percent of 
        revenue growth from digital advertising in 2016, including 77 
        percent of gross spending. 79 percent of online Americans--
        representing 68 percent of all Americans--use the single 
        largest social network, while 66 percent of these users are 
        most likely to get their news from that site.
            (10) In its 2006 rulemaking, the Federal Election 
        Commission noted that only 18 percent of all Americans cited 
        the internet as their leading source of news about the 2004 
        Presidential election; by contrast, the Pew Research Center 
        found that 65 percent of Americans identified an internet-based 
        source as their leading source of information for the 2016 
        election.
            (11) The Federal Election Commission, the independent 
        Federal agency charged with protecting the integrity of the 
        Federal campaign finance process by providing transparency and 
        administering campaign finance laws, has failed to take action 
        to address online political advertisements.
            (12) In testimony before the Senate Select Committee on 
        Intelligence titled, ``Disinformation: A Primer in Russian 
        Active Measures and Influence Campaigns,'' multiple expert 
        witnesses testified that while the disinformation tactics of 
        foreign adversaries have not necessarily changed, social media 
        services now provide ``platform[s] practically purpose-built 
        for active measures[.]'' Similarly, as Gen. (RET) Keith B. 
        Alexander, the former Director of the National Security Agency, 
        testified, during the Cold War ``if the Soviet Union sought to 
        manipulate information flow, it would have to do so principally 
        through its own propaganda outlets or through active measures 
        that would generate specific news: planting of leaflets, 
        inciting of violence, creation of other false materials and 
        narratives. But the news itself was hard to manipulate because 
        it would have required actual control of the organs of media, 
        which took long-term efforts to penetrate. Today, however, 
        because the clear majority of the information on social media 
        sites is uncurated and there is a rapid proliferation of 
        information sources and other sites that can reinforce 
        information, there is an increasing likelihood that the 
        information available to average consumers may be inaccurate 
        (whether intentionally or otherwise) and may be more easily 
        manipulable than in prior eras.''.
            (13) Current regulations on political advertisements do not 
        provide sufficient transparency to uphold the public's right to 
        be fully informed about political advertisements made online.

SEC. 4. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) the dramatic increase in digital political 
        advertisements, and the growing centrality of online platforms 
        in the lives of Americans, requires the Congress and the 
        Federal Election Commission to take meaningful action to ensure 
        that laws and regulations provide the accountability and 
        transparency that is fundamental to our democracy;
            (2) free and fair elections require both transparency and 
        accountability which give the public a right to know the true 
        sources of funding for political advertisements in order to 
        make informed political choices and hold elected officials 
        accountable; and
            (3) transparency of funding for political advertisements is 
        essential to enforce other campaign finance laws, including the 
        prohibition on campaign spending by foreign nationals.

SEC. 5. EXPANSION OF DEFINITION OF PUBLIC COMMUNICATION.

    (a) In General.--Paragraph (22) of section 301 of the Federal 
Election Campaign Act of 1971 (52 U.S.C. 30101(22)) is amended by 
striking ``or satellite communication'' and inserting ``satellite, paid 
internet, or paid digital communication''.
    (b) Treatment of Contributions and Expenditures.--Section 301 of 
such Act (52 U.S.C. 30101) is amended--
            (1) in paragraph (8)(B)--
                    (A) by striking ``on broadcasting stations, or in 
                newspapers, magazines, or similar types of general 
                public political advertising'' in clause (v) and 
                inserting ``in any public communication'';
                    (B) by striking ``broadcasting, newspaper, 
                magazine, billboard, direct mail, or similar type of 
                general public communication or political advertising'' 
                in clause (ix)(1) and inserting ``public 
                communication''; and
                    (C) by striking ``but not including the use of 
                broadcasting, newspapers, magazines, billboards, direct 
                mail, or similar types of general public communication 
                or political advertising'' in clause (x) and inserting 
                ``but not including use in any public communication''; 
                and
            (2) in paragraph (9)(B)--
                    (A) by striking clause (i) and inserting the 
                following:
                            ``(i) any news story, commentary, or 
                        editorial distributed through the facilities of 
                        any broadcasting station or any print, online, 
                        or digital newspaper, magazine, blog, 
                        publication, or periodical, unless such 
                        broadcasting, print, online, or digital 
                        facilities are owned or controlled by any 
                        political party, political committee, or 
                        candidate;''; and
                    (B) by striking ``on broadcasting stations, or in 
                newspapers, magazines, or similar types of general 
                public political advertising'' in clause (iv) and 
                inserting ``in any public communication''.
    (c) Disclosure and Disclaimer Statements.--Subsection (a) of 
section 318 of such Act (52 U.S.C. 30120) is amended--
            (1) by striking ``financing any communication through any 
        broadcasting station, newspaper, magazine, outdoor advertising 
        facility, mailing, or any other type of general public 
        political advertising'' and inserting ``financing any public 
        communication''; and
            (2) by striking ``solicits any contribution through any 
        broadcasting station, newspaper, magazine, outdoor advertising 
        facility, mailing, or any other type of general public 
        political advertising'' and inserting ``solicits any 
        contribution through any public communication''.

SEC. 6. EXPANSION OF DEFINITION OF ELECTIONEERING COMMUNICATION.

    (a) Expansion to Online Communications.--
            (1) Application to qualified internet and digital 
        communications.--
                    (A) In general.--Subparagraph (A) of section 
                304(f)(3) of the Federal Election Campaign Act of 1971 
                (52 U.S.C. 30104(f)(3)(A)) is amended by striking ``or 
                satellite communication'' each place it appears in 
                clauses (i) and (ii) and inserting ``satellite, or 
                qualified internet or digital communication''.
                    (B) Qualified internet or digital communication.--
                Paragraph (3) of section 304(f) of such Act (52 U.S.C. 
                30104(f)) is amended by adding at the end the following 
                new subparagraph:
                    ``(D) Qualified internet or digital 
                communication.--The term `qualified internet or digital 
                communication' means any communication which is placed 
                or promoted for a fee on an online platform (as defined 
                in subsection (j)(3)).''.
            (2) Nonapplication of relevant electorate to online 
        communications.--Section 304(f)(3)(A)(i)(III) of such Act (52 
        U.S.C. 30104(f)(3)(A)(i)(III)) is amended by inserting ``any 
        broadcast, cable, or satellite'' before ``communication''.
            (3) News exemption.--Section 304(f)(3)(B)(i) of such Act 
        (52 U.S.C. 30104(f)(3)(B)(i)) is amended to read as follows:
                            ``(i) a communication appearing in a news 
                        story, commentary, or editorial distributed 
                        through the facilities of any broadcasting 
                        station or any online or digital newspaper, 
                        magazine, blog, publication, or periodical, 
                        unless such broadcasting, online, or digital 
                        facilities are owned or controlled by any 
                        political party, political committee, or 
                        candidate;''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to communications made on or after January 1, 2018.

SEC. 7. APPLICATION OF DISCLAIMER STATEMENTS TO ONLINE COMMUNICATIONS.

    (a) Clear and Conspicuous Manner Requirement.--Subsection (a) of 
section 318 of the Federal Election Campaign Act of 1971 (52 U.S.C. 
30120(a)) is amended--
            (1) by striking ``shall clearly state'' each place it 
        appears in paragraphs (1), (2), and (3) and inserting ``shall 
        state in a clear and conspicuous manner''; and
            (2) by adding at the end the following flush sentence: 
        ``For purposes of this subsection, a communication does not 
        make a statement in a clear and conspicuous manner if it is 
        difficult to read or hear or if the placement is easily 
        overlooked.''.
    (b) Special Rules for Qualified Internet or Digital 
Communications.--
            (1) In general.--Section 318 of such Act (52 U.S.C. 30120) 
        is amended by adding at the end the following new subsection:
    ``(e) Special Rules Qualified Internet or Digital Communications.--
            ``(1) Special rules with respect to statements.--In the 
        case of any qualified internet or digital communication (as 
        defined in section 304(f)(3)(D)) which is disseminated through 
        a medium in which the provision of all of the information 
        specified in this section is not possible, the communication 
        shall, in a clear and conspicuous manner--
                    ``(A) state the name of the person who paid for the 
                communication; and
                    ``(B) provide a means for the recipient of the 
                communication to obtain the remainder of the 
                information required under this section with minimal 
                effort and without receiving or viewing any additional 
                material other than such required information.
            ``(2) Safe harbor for determining clear and conspicuous 
        manner.--A statement in qualified internet or digital 
        communication (as defined in section 304(f)(3)(D)) shall be 
        considered to be made in a clear and conspicuous manner as 
        provided in subsection (a) if the communication meets the 
        following requirements:
                    ``(A) Text or graphic communications.--In the case 
                of a text or graphic communication, the statement--
                            ``(i) appears in letters at least as large 
                        as the majority of the text in the 
                        communication; and
                            ``(ii) meets the requirements of paragraphs 
                        (2) and (3) of subsection (c).
                    ``(B) Audio communications.--In the case of an 
                audio communication, the statement is spoken in a 
                clearly audible and intelligible manner at the 
                beginning or end of the communication and lasts at 
                least 3 seconds.
                    ``(C) Video communications.--In the case of a video 
                communication which also includes audio, the 
                statement--
                            ``(i) is included at either the beginning 
                        or the end of the communication; and
                            ``(ii) is made both in--
                                    ``(I) a written format that meets 
                                the requirements of subparagraph (A) 
                                and appears for at least 4 seconds; and
                                    ``(II) an audible format that meets 
                                the requirements of subparagraph (B).
                    ``(D) Other communications.--In the case of any 
                other type of communication, the statement is at least 
                as clear and conspicuous as the statement specified in 
                subparagraphs (A), (B), or (C).''.
            (2) Nonapplication of certain exceptions.--The exceptions 
        provided in section 110.11(f)(1)(i) and (ii) of title 11, Code 
        of Federal Regulations, or any successor to such rules, shall 
        have no application to qualified internet or digital 
        communications (as defined in section 304(f)(3)(D) of the 
        Federal Election Campaign Act of 1971).
    (c) Modification of Additional Requirements for Certain 
Communications.--Section 318(d) of such Act (52 U.S.C. 30120(d)) is 
amended--
            (1) in paragraph (1)(A)--
                    (A) by striking ``which is transmitted through 
                radio'' and inserting ``which is in an audio format''; 
                and
                    (B) by striking ``By radio'' in the heading and 
                inserting ``Audio format'';
            (2) in paragraph (1)(B)--
                    (A) by striking ``which is transmitted through 
                television'' and inserting ``which is in video 
                format''; and
                    (B) by striking ``By television'' in the heading 
                and inserting ``Video format''; and
            (3) in paragraph (2)--
                    (A) by striking ``transmitted through radio or 
                television'' and inserting ``made in audio or video 
                format''; and
                    (B) by striking ``through television'' in the 
                second sentence and inserting ``in video format''.

SEC. 8. POLITICAL RECORD REQUIREMENTS FOR ONLINE PLATFORMS.

    (a) In General.--Section 304 of the Federal Election Campaign Act 
of 1971 (52 U.S.C. 30104) is amended by adding at the end the following 
new subsection:
    ``(j) Disclosure of Certain Online Advertisements.--
            ``(1) In general.--
                    ``(A) Requirements for online platforms.--An online 
                platform shall maintain, and make available for online 
                public inspection in machine readable format, a 
                complete record of any request to purchase on such 
                online platform a qualified political advertisement 
                which is made by a person whose aggregate requests to 
                purchase qualified political advertisements on such 
                online platform during the calendar year exceeds $500.
                    ``(B) Requirements for advertisers.--Any person who 
                requests to purchase a qualified political 
                advertisement on an online platform shall provide the 
                online platform with such information as is necessary 
                for the online platform to comply with the requirements 
                of subparagraph (A).
            ``(2) Contents of record.--A record maintained under 
        paragraph (1)(A) shall contain--
                    ``(A) a digital copy of the qualified political 
                advertisement;
                    ``(B) a description of the audience targeted by the 
                advertisement, the number of views generated from the 
                advertisement, and the date and time that the 
                advertisement is first displayed and last displayed; 
                and
                    ``(C) information regarding--
                            ``(i) the average rate charged for the 
                        advertisement;
                            ``(ii) the name of the candidate to which 
                        the advertisement refers and the office to 
                        which the candidate is seeking election, the 
                        election to which the advertisement refers, or 
                        the national legislative issue to which the 
                        advertisement refers (as applicable);
                            ``(iii) in the case of a request made by, 
                        or on behalf of, a candidate, the name of the 
                        candidate, the authorized committee of the 
                        candidate, and the treasurer of such committee; 
                        and
                            ``(iv) in the case of any request not 
                        described in clause (iii), the name of the 
                        person purchasing the advertisement, the name, 
                        address, and phone number of a contact person 
                        for such person, and a list of the chief 
                        executive officers or members of the executive 
                        committee or of the board of directors of such 
                        person.
            ``(3) Online platform.--For purposes of this subsection, 
        the term `online platform' means any public-facing website, web 
        application, or digital application (including a social 
        network, ad network, or search engine) which--
                    ``(A) sells qualified political advertisements; and
                    ``(B) has 50,000,000 or more unique monthly United 
                States visitors or users for a majority of months 
                during the preceding 12 months.
            ``(4) Qualified political advertisement.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified political advertisement' means any 
                advertisement (including search engine marketing, 
                display advertisements, video advertisements, native 
                advertisements, and sponsorships) that--
                            ``(i) is made by or on behalf of a 
                        candidate; or
                            ``(ii) communicates a message relating to 
                        any political matter of national importance, 
                        including--
                                    ``(I) a candidate;
                                    ``(II) any election to Federal 
                                office; or
                                    ``(III) a national legislative 
                                issue of public importance.
            ``(5) Time to maintain file.--The information required 
        under this subsection shall be made available as soon as 
        possible and shall be retained by the online platform for a 
        period of not less than 4 years.
            ``(6) Penalties.--For penalties for failure by online 
        platforms, and persons requesting to purchase a qualified 
        political advertisement on online platforms, to comply with the 
        requirements of this subsection, see section 309.''.
    (b) Rulemaking.--Not later than 90 days after the date of the 
enactment of this Act, the Federal Election Commission shall establish 
rules--
            (1) requiring common data formats for the record required 
        to be maintained under section 304(j) of the Federal Election 
        Campaign Act of 1971 (as added by subsection (a)) so that all 
        online platforms submit and maintain data online in a common, 
        machine-readable and publicly accessible format; and
            (2) establishing search interface requirements relating to 
        such record, including searches by candidate name, issue, 
        purchaser, and date.
    (c) Reporting.--Not later than 2 years after the date of the 
enactment of this Act, and biannually thereafter, the Chairman of the 
Federal Election Commission shall submit a report to Congress on--
            (1) matters relating to compliance with and the enforcement 
        of the requirements of section 304(j) of the Federal Election 
        Campaign Act of 1971, as added by subsection (a);
            (2) recommendations for any modifications to such section 
        to assist in carrying out its purposes; and
            (3) identifying ways to bring transparency and 
        accountability to political advertisements distributed online 
        for free.

SEC. 9. PREVENTING CONTRIBUTIONS, EXPENDITURES, INDEPENDENT 
              EXPENDITURES, AND DISBURSEMENTS FOR ELECTIONEERING 
              COMMUNICATIONS BY FOREIGN NATIONALS IN THE FORM OF ONLINE 
              ADVERTISING.

    Section 319 of the Federal Election Campaign Act of 1971 (52 U.S.C. 
30121) is amended by adding at the end the following new subsection:
    ``(c) Each television or radio broadcast station, provider of cable 
or satellite television, or online platform (as defined in section 
304(j)(3)) shall make reasonable efforts to ensure that communications 
described in section 318(a) and made available by such station, 
provider, or platform are not purchased by a foreign national, directly 
or indirectly.''.
                                 <all>