For the People Act of 2021 (H.R. 1; 117th Congress)/Division B/Title IV/Subtitle C

by John Sarbanes

SEC. 4201. SHORT TITLE.

This subtitle may be cited as the “Honest Ads Act”.

SEC. 4202. 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.

SEC. 4203. 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 US 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 Americans 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 United States 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 smart phone 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. Keith B. Alexander (RET.), 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. 4204. 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. 4205. 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, 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) 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”.

SEC. 4206. 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 (k)(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, 2022.

SEC. 4207. 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”.

SEC. 4208. POLITICAL RECORD REQUIREMENTS FOR ONLINE PLATFORMS.

(a) In General.—Section 304 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30104), as amended by section 4002, is amended by adding at the end the following new subsection:

“(k) 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, the number of views by unique individuals generated by the advertisement, the number of times the advertisement was shared, 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 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, and, if the person purchasing the advertisement is acting as the agent of a foreign principal under the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611 et seq.), a statement that the person is acting as the agent of a foreign principal and the identification of the foreign principal involved.

“(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.—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) SAFE HARBOR FOR PLATFORMS MAKING BEST EFFORTS TO IDENTIFY REQUESTS WHICH ARE SUBJECT TO RECORD MAINTENANCE REQUIREMENTS.—In accordance with rules established by the Commission, if an online platform shows that the platform used best efforts to determine whether or not a request to purchase a qualified political advertisement was subject to the requirements of this subsection, the online platform shall not be considered to be in violation of such requirements.

“(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) Rulemaking.—Not later than 120 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(k) 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;

(2) establishing search interface requirements relating to such record, including searches by candidate name, issue, purchaser, and date; and

(3) establishing the criteria for the safe harbor exception provided under paragraph (6) of section 304(k) of such Act (as added by subsection (a)).

(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(k) 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. 4209. 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), as amended by section 4101(b), is further amended by adding at the end the following new subsection:

“(d) Responsibilities Of Broadcast Stations, Providers Of Cable And Satellite Television, And Online Platforms.—

“(1) RESPONSIBILITIES DESCRIBED.—Each television or radio broadcast station, provider of cable or satellite television, or online platform (as defined in section 304(k)(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. For purposes of the previous sentence, a station, provider, or online platform shall not be considered to have made reasonable efforts under this paragraph in the case of the availability of a communication unless the station, provider, or online platform directly inquires from the individual or entity making such purchase whether the purchase is to be made by a foreign national, directly or indirectly.

“(2) SPECIAL RULES FOR DISBURSEMENT PAID WITH CREDIT CARD.—For purposes of paragraph (1), a television or radio broadcast station, provider of cable or satellite television, or online platform shall be considered to have made reasonable efforts under such paragraph in the case of a purchase of the availability of a communication which is made with a credit card if—

“(A) the individual or entity making such purchase is required, at the time of making such purchase, to disclose the credit verification value of such credit card; and

“(B) the billing address associated with such credit card is located in the United States or, in the case of a purchase made by an individual who is a United States citizen living outside of the United States, the individual provides the television or radio broadcast station, provider of cable or satellite television, or online platform with the United States mailing address the individual uses for voter registration purposes.”.

=SEC. 4210. INDEPENDENT STUDY ON MEDIA LITERACY AND ONLINE POLITICAL CONTENT CONSUMPTION.

(a) Independent Study.—Not later than 30 days after the date of enactment of this Act, the Federal Election Commission shall commission an independent study and report on media literacy with respect to online political content consumption among voting-age Americans.

(b) Elements.—The study and report under subsection (a) shall include the following:

(1) An evaluation of media literacy skills, such as the ability to evaluate sources, synthesize multiple accounts into a coherent understanding of an issue, understand the context of communications, and responsibly create and share information, among voting-age Americans.

(2) An analysis of the effects of media literacy education and particular media literacy skills on the ability to critically consume online political content, including political advertising.

(3) Recommendations for improving voting-age Americans’ ability to critically consume online political content, including political advertising.

(c) Deadline.—Not later than 270 days after the date of enactment of this Act, the entity conducting the study and report under subsection (a) shall submit the report to the Commission.

(d) Submission To Congress.—Not later than 30 days after receiving the report under subsection (c), the Commission shall submit the report to the Committee on House Administration of the House of Representatives and the Committee on Rules and Administration of the Senate, together with such comments on the report as the Commission considers appropriate.

(e) Definition Of Media Literacy.—The term “media literacy” means the ability to—

(1) access relevant and accurate information through media;

(2) critically analyze media content and the influences of media;

(3) evaluate the comprehensiveness, relevance, credibility, authority, and accuracy of information;

(4) make educated decisions based on information obtained from media and digital sources;

(5) operate various forms of technology and digital tools; and

(6) reflect on how the use of media and technology may affect private and public life.

SEC. 4211. REQUIRING ONLINE PLATFORMS TO DISPLAY NOTICES IDENTIFYING SPONSORS OF POLITICAL ADVERTISEMENTS AND TO ENSURE NOTICES CONTINUE TO BE PRESENT WHEN ADVERTISEMENTS ARE SHARED.

(a) Requirement.—Section 304 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30104), as amended by section 4002 and section 4208(a), is amended by adding at the end the following new subsection:

“(l) Ensuring Display And Sharing Of Sponsor Identification In Online Political Advertisements.—

“(1) REQUIREMENT.— An online platform displaying a qualified political advertisement 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) DEFINITIONS.—In this subsection,—

“(A) the term ‘online platform’ has the meaning given such term in subsection (k)(3); and

“(B) the term ‘qualified political advertisement’ has the meaning given such term in subsection (k)(4).”.

(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.