II 118th CONGRESS 1st Session S. 486 IN THE SENATE OF THE UNITED STATES February 16, 2023 Ms. Klobuchar (for herself, Mr. Graham , and Mr. Warner ) introduced the following bill; which was read twice and referred to the Committee on Rules and 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.

1. Short title This Act may be cited as the Honest Ads Act . 2. Purpose The purpose of this subtitle is to enhance the integrity of American democracy and national security by improving disclosure requirements for online political advertisements in order to uphold the Supreme Court’s well-established standard that the electorate bears the right to be fully informed. 3. Findings Congress makes the following findings: (1) In 2002, the Bipartisan Campaign Reform Act of 2002 ( Public Law 107–155 ) 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. The Court reaffirmed this conclusion in 2010 by an 8–1 vote. (2) In its 2006 rulemaking, the Federal Election Commission, the independent Federal agency charged with protecting the integrity of the Federal campaign finance process, noted that 18 percent of all Americans cited the internet as their leading source of news about the 2004 Presidential election. By contrast, Gallup and the Knight Foundation found in 2020 that the majority of Americans, 58 percent, got most of their news about elections online. (3) According to studies from AdImpact and Borrell Associates, in 2020, an estimated $1,700,000,000 was spent on online political advertising, more than 10 times the amount spent in 2012. (4) In order to enhance transparency of all political advertisement funding, it is prudent to extend to online internet platforms the same types of political advertisement disclosure requirements applicable to broadcast television and radio stations, and providers of cable and satellite television. (5) Effective and complete transparency for voters must include information about the true and original source of money given, transferred, and spent on political advertisements made online. (6) Requiring the disclosure of this information is a necessary and narrowly tailored means to inform the voting public of who is behind digital advertising disseminated to influence their votes and to enable the Federal Election Commission and the Department of Justice to detect and prosecute illegal foreign spending on local, State, and Federal elections and other campaign finance violations. (7) Paid advertising on large online platforms is different from advertising placed on other common media in terms of the comparatively low cost of reaching large numbers of people, the availability of sophisticated microtargeting, and the ease with which online advertisers, particularly those located outside the United States, can evade disclosure requirements. Requiring large online platforms to maintain public files of information about the online political ads they disseminate is the best and least restrictive means to ensure the voting public has complete information about who is trying to influence their votes and to aid enforcement of other laws, including the prohibition on foreign money in domestic campaigns. (8) 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 247,000,000 American users—over 153,000,000 of them on a daily basis. By contrast, the largest cable television provider has 16,142,000 subscribers, while the largest satellite television provider has 13,300,000 subscribers. And the most-watched television broadcast in United States history had 118,000,000 viewers. (9) 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. (10) Large social media platforms are the only entities in possession of certain key data related to paid online ads, including the exact audience targeted by those ads and their number of impressions. Such information, which cannot be reliably disclosed by the purchasers of ads, is extremely useful for informing the electorate, guarding against corruption, and aiding in the enforcement of existing campaign finance regulations. (11) Paid advertisements on social media platforms have served as critical tools for foreign online influence campaigns—even those that rely on large amounts of unpaid content—because such ads allow foreign actors to test the effectiveness of different messages, expose their messages to audiences who have not sought out such content, and recruit audiences for future campaigns and posts. (12) A 2019 Senate Select Committee on Intelligence’s Report on Russian Active Measures Campaigns and Interference in the 2016 U.S. Election Volume 2: Russia’s Use of Social Media with Additional Views, the Committee recommended that Congress examine legislative approaches to ensuring Americans know the sources of online political advertisements. The Federal Election Campaign Act of 1971 requires political advertisements on television, radio and satellite to disclose the sponsor of the advertisement. The same requirements should apply online. This will also help to ensure that the IRA or any similarly situated actors cannot use paid advertisements for purposes of foreign interference. . (13) On March 16, 2021, the Office of the Director of National Intelligence released the declassified Intelligence Community assessment of foreign threats to the 2020 U.S. Federal elections. The declassified report found: Throughout the election cycle, Russia’s online influence actors sought to affect U.S. public perceptions of the candidates, as well as advance Moscow’s longstanding goals of undermining confidence in U.S. election processes and increasing sociopolitical divisions among the American people. The report also determined that Iran sought to influence the election by creating and amplifying social media content that criticized [candidates]. (14) According to a Wall Street Journal report in April 2021, voluntary ad libraries operated by major platforms rely on foreign governments to self-report political ad purchases. These ad-buys, including those diminishing major human rights violations like the Uighur genocide, are under-reported by foreign government purchasers, with no substantial oversight or repercussions from the platforms. (15) Multiple reports have indicated that online ads have become a key vector for strategic influence by the People’s Republic of China. An April 2021 Wall Street Journal report noted that the Chinese Government and Chinese State-owned enterprises are major purchasers of ads on the U.S.’s largest social media platform, including to advance Chinese propaganda. (16) Large online platforms have made changes to their policies intended to make it harder for foreign actors to purchase political ads. However, these private actions have not been taken by all platforms, have not been reliably enforced, and are subject to immediate change at the discretion of the platforms. (17) The Federal Election Commission's 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. 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, be they foreign or domestic, 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. 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)(v), by striking on broadcasting stations, or in newspapers, magazines, or similar types of general public political advertising and inserting in any public communication ; and (2) in paragraph (9)(B)— (A) by amending clause (i) to read as follows: (i) any news story, commentary, or editorial distributed through the facilities of any broadcasting station or any print, online, or digital newspaper, magazine, publication, periodical, blog, or platform, unless such broadcasting, print, online, or digital facilities are owned or controlled by any political party, political committee, or candidate; ; and (B) in clause (iv), by striking on broadcasting stations, or in newspapers, magazines, or similar types of general public political advertising 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 . (d) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act and shall take effect without regard to whether or not the Federal Election Commission has promulgated the final regulations necessary to carry out this part and the amendments made by this part by the deadline set forth in subsection (e). (e) Regulation Not later than 1 year after the date of the enactment of this Act, the Federal Election Commission shall promulgate regulations on what constitutes a paid internet or paid digital communication for purposes of paragraph (22) of section 301 of the Federal Election Campaign Act of 1971 ( 52 U.S.C. 30101(22) ), as amended by subsection (a), except that such regulation shall not define a paid internet or paid digital communication to include communications for which the only payment consists of internal resources, such as employee compensation, of the entity paying for the communication. 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, publication, periodical, blog, or platform, 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, 2024, and shall take effect without regard to whether or not the Federal Election Commission has promulgated regulations to carry out such amendments. 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 section, 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 for 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 subparagraph (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 . (d) Effective date The amendment made by subsection (a) shall take effect on the date of the enactment of this Act and shall take effect without regard to whether or not the Federal Election Commission has promulgated regulations to carry out such amendments. 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 (i) In general An online platform shall maintain, and make available for online public inspection in machine readable format, a complete record of any qualified political advertisement which is purchased by a person whose aggregate purchases of qualified political advertisements on such online platform during the calendar year exceeds $500. (ii) Requirement relating to political ads sold by third party advertising vendors An online platform that displays a qualified political advertisement sold by a third party advertising vendor shall include on its own platform— (I) an easily accessible and identifiable link to the records maintained by the third-party advertising vendor under clause (i) regarding such qualified political advertisement; or (II) in any case in which the third party advertising vendor does not make such records available, a statement that no records from the third party advertising vendors records are available. (B) Requirements for advertisers Any person who purchases 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 that received 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 total cost of the advertisement (which may be rounded to the nearest $100); (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 and address 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 (A) In general For purposes of this subsection, subject to subparagraph (B), the term online platform means any public-facing website, web application, or digital application (including a social network, ad network, or search engine) which— (i) (I) sells qualified political advertisements; and (II) has 50,000,000 or more unique monthly United States visitors or users for a majority of months during the preceding 12 months; or (ii) is a third-party advertising vendor that has 50,000,000 or more unique monthly United States visitors in the aggregate on any advertisement space that it has sold or bought for a majority of months during the preceding 12 months, as measured by an independent digital ratings service accredited by the Media Ratings Council (or its successor). (B) Exemption Such term shall not include any online platform that is a distribution facility of any broadcasting station or newspaper, magazine, blog, publication, or periodical. (C) Third-party advertising vendor defined For purposes of this subsection, the term third-party advertising vendor includes any third-party advertising vendor network, advertising agency, advertiser, or third-party advertisement serving company that buys and sells advertisement space on behalf of unaffiliated third-party websites, search engines, digital applications, or social media sites. (4) Qualified political advertisement 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— (A) is made by or on behalf of a candidate; or (B) 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) Special rule For purposes of this subsection, multiple versions of an advertisement that contain no material differences (such as versions that differ only because they contain a recipient’s name, or differ only in size, color, font, or layout) may be treated as a single qualified political advertisement. (7) 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) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act and shall take effect without regard to whether or not the Federal Election Commission has promulgated the final regulations necessary to carry out this part and the amendments made by this part by the deadline set forth in subsection (c). (c) Rulemaking Not later than 120 days after the date of the enactment of this Act, the Federal Election Commission shall establish rules— (1) for determining whether an advertisement communicates a national legislative issue for purposes of section 304(j) of the Federal Election Campaign Act of 1971 (as added by subsection (a)); (2) requiring common data formats for the record required to be maintained under such section 304(j) so that all online platforms submit and maintain data online in a common, machine-readable and publicly accessible format; and (3) establishing search interface requirements relating to such record, including searches by candidate name, issue, purchaser, and date. (d) 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. 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) Responsibilities of broadcast stations, providers of cable and satellite television, and online platforms (1) In general 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. (2) Regulations Not later than 1 year after the date of the enactment of this subsection, the Commission shall promulgate regulations on what constitutes reasonable efforts under paragraph (1). . 10. Requiring online platforms to display notices identifying sponsors of political advertisements and to ensure notices continue to be present when advertisements are shared (a) In general Section 304 of the Federal Election Campaign Act of 1971 ( 52 U.S.C. 30104 ), as amended by section 8(a), is amended by adding at the end the following new subsection: (k) Ensuring display and sharing of sponsor identification in online political advertisements (1) Requirement Any online platform that displays a qualified political advertisement (regardless of whether such qualified political advertisement was purchased directly from the online platform) shall— (A) display with the advertisement a visible notice identifying the sponsor of the advertisement (or, if it is not practical for the platform to display such a notice, a notice that the advertisement is sponsored by a person other than the platform); and (B) ensure that the notice will continue to be displayed if a viewer of the advertisement shares the advertisement with others on that platform. (2) Safe harbor An online platform shall not be treated as having failed to comply with the requirements of paragraph (1)(A) for the misidentification of a person as the sponsor of the advertisement if— (A) the person placing the online advertisement designated the person displayed in the advertisement as the sponsor; and (B) the online platform relied on such designation in good faith. (3) Definitions In this subsection— (A) the term online platform has the meaning given such term in subsection (j)(3); (B) the term ‘ qualified political advertisement has the meaning given such term in subsection (j)(4); and (C) the term sponsor means the person purchasing the advertisement. . (b) Effective date The amendment made by subsection (a) shall apply with respect to advertisements displayed on or after the 120–day period which begins on the date of the enactment of this Act and shall take effect without regard to whether or not the Federal Election Commission has promulgated regulations to carry out such amendments.