Now that we are immersed in the heart of the political broadcasting season, issues of sponsorship identification regularly arise. For on-air broadcasts, any paid advertisement that conveys a message dealing with any controversial issue of public importance (state or federal) requires at a minimum an on-air sponsorship identification stating that the ad was “paid for” or “sponsored by” the person or organization that paid for the time. Federal candidates have a more extensive obligation for identifying themselves in their ads, particularly if they mention an opposing candidate. These identification rules come both from the FCC (which stations need to enforce) and from the Federal Election Commission, which are the responsibility of the candidate and their campaign committee. To help sort out some of these obligations, and the requirements for political disclosure statements and federal candidate certifications that entitle them to lowest unit rates, check out this video that I prepared for the Indiana Broadcasters Association as part of a series on political broadcasting topics: https://www.indianabroadcasters.org/iba-news/political-advertising-requirements-with-iba-washington-counsel-david-oxenford/
The video covers the requirements of broadcasters to ensure that the proper sponsorship identification is contained in political advertising. Online political advertising, however, is much more complicated as there is no single body of law that governs those responsibilities. As we wrote here, the FEC has general requirements providing that online political advertising must have sponsorship identification. The FEC also has an open proceeding to mandate more stringent sponsorship identification obligations akin to those required on broadcast and local cable political advertising. Last week, the Congressional Research Service issued a study on the state of the law regarding online political advertising, highlighting the many issues involved in providing more robust political disclosures. These issues are at least partially triggered by the many players involved in online advertising sales. There is a very readable outline on pages 16-19 of the report on all the players in the digital advertising ecosystem – with intermediaries, including demand- and supply-side platforms, that complicate the usual direct interaction between the media outlet and the advertising buyer, which in turn complicates the political compliance process for sponsorship identification. The study, on page 18, even cites to the article that I wrote discussing the concerns about sponsorship identification in any programmatic political advertising.
The CRS report covers many of the pending federal legislative proposals to address concerns about political advertising disclosures. While it is a very readable and comprehensive review of the current federal sponsorship identification obligations (and of some of the ambiguities in federal rules for online political advertising), the CRS report does not provide a review of some of the industry codes of practice and state regulations that have attempted to address the lack of uniform federal obligations for online political sponsorship identification. We wrote here about the early days of the New York and Washington State political advertising regulations that govern online political advertising, and these state regulations have become even more detailed in recent years as implementing regulations have been adopted. California, Virginia, Nevada and several other states have also adopted rules requiring that political sellers know their customers and provide some public disclosure about the sponsors of online political messages. So, too, have various trade organizations adopted voluntary principles governing online political advertising sponsorship disclosures, including the Digital Advertising Alliance’s Application of Self-Regulatory Principles of Transparency and Accountability to Political Advertising and the Network Advertising Initiative’s Code of Conduct.
In advising clients during this busy election year, we have discovered that these voluntary codes of conduct and state regulations have made for a very confusing legal landscape for digital political advertising. None of these rule and laws are the same – they do not even work off the same models. All of them place burdens on political advertisers, and some impose burdens on the media platforms (although see the decision we wrote about here where a Maryland statute putting disclosure burdens on the platforms was declared unconstitutional). Other laws are ambiguous as to where the legal obligations lay. This may be why we have seen calls by some of the biggest online platforms, including Facebook, for federal legislation to make the rules of the road uniform and transparent. Given the current legislative climate and the short timeline before the election and the end of the current Congressional session, the prospects of such federal legislation being enacted soon are probably dim. Until then, digital platforms selling online political advertising need to study these differing regulatory schemes to avoid becoming part of some controversy over hidden political persuasion taking place on their services.