Fool Me Once: Regulating 'Fake News' and Other Online Advertising

Abstract

A lack of transparency for online political advertising has long been a problem in American political campaigns. Disinformation attacks that American voters have experienced since the 2016 campaign have made the need for regulatory action more pressing.

Internet platforms prefer self-regulation and have only recently come around to supporting proposed transparency legislation. While government must not regulate the content of political speech, it can, and should, force transparency into the process. We propose several interventions aimed at transparency. First, and most importantly, campaign finance regulators should require platforms to store and make available (1) ads run on their platforms, and (2) the audience at whom the ad was targeted. Audience availability can be structured to avoid privacy concerns, and it meets an important speech value in the “marketplace of ideas” theory of the First Amendment—that of enabling counter speech. Our proposed regulations would capture any political advertising, including disinformation, that is promoted via paid distribution on social media, as well as all other online political advertising. Second, existing loopholes in transparency regulations related to online advertising should be closed. Congress has a role here as it has prevented regulatory agencies from acting to require disclosure from so-called dark money groups. Finally, government should require that platforms offer an opt-in system for social media users to view narrowly-targeted ads or disputed content.

Keywords: Fake News, campaign finance, disclosure, transparency, regulation, national security, social media

JEL Classification: K20, K42, Z38