>> a house hearing looked at the political and social media and the effect of russia in the 2016 presidential election. congressman william is the oversight and government reform subcommittee. it is just under two hours. >> the subcommittee on information technology will come to order without objection. the chair is authorized to declare recess at any time. good afternoon. today's hearing is part of a series of hearings the committee has held to analyze the existing law and regulations that may have become obsolete or need updating to reflect technological advances. we have held hearings on the technologies, drones, vehicles and other things and the other issues. today, we turned our attention to the laws and regulations in the political advertisements into the federal election

commission oversees the campaign-finance law and enforcement of disclaimer requirements for the public communication and the candidates and campaign authorities or political action committees and federal offices. in addition, the fcc enforces additional to closure and requirements on broadcast cable satellite and radio ads. some have proposed increase disclaimer malls are those on internet platforms and have proposed a role for the ftc. at the interface between these three regulatory agencies and how they each apply to the wall is something to the oversight committee is situated to examine, and i hope that we dig into that today. in many ways this is an example of the continued efforts to examine the technology is the level of urgency and importance to the hearing that cannot be understated. since the democratic experiment, the adversaries have sought to destroy what our forefathers fought for to use the nation's

unique undermining of the robust resilience but now the tools have changed. for the political advertisements on the major american social media platforms that every technological advancement the nation's bigotry posture has devolved to meet the changing needs of the day. today i hope to explore questions for the reform of the nation's political advertisement advertisements law and regulations. as always i'm honored to be exploring these issues in a bipartisan fashion with my friend and ranking member the honorable robin kelly and the great state of illinois it is always good to be with you. i think my colleagues and witnesses and citizens that joined us today and those watching online who are participating today now it is my honor to recognize ms. kelly for her opening statement.

>> thank you for holding this important hearing we will examine the federal law and regulation governing the political advertising just one month at the reveal that russians spend $100,000 to buy 3,000 ads to influence the 2016 election. those reached 10 million americans. these are just the numbers we know of. there are likely many more that were purchased directly or indirectly by the russian government. u.s. campaign finance law prohibits the money but allows it to purchase issue ads. all must carry a disclaimer which is both disclosed to the buyer but this does not extend to the digital ads like those that run on facebook. the russian government exploited these loopholes in the 2016 election's russians were able to take advantage of the antiquated campaign finance ruleintegratede misinformation campaign on facebook, twitter and google.

they targeted their ad sometimes posing as community activists with the intention of turning americans against americans. they thought that this was a congressional district in the state fake news. the last time the federal election commission updated these regulations was april, 2006. more than ten years ago. that was before the iphone had been introduced into twitter was still in development and facebook was only for college students. in fact 35 of the members were not yet in congress myself or the chairman included. much has changed in that time. a presidential candidate use twitter to wage a presidential campaign and it is time we recognized in today's world television and radio are not the only media carrying political ads. i'm confident we can prevent meddling by russia and other states by protecting the first amendment rights of americans. i was encouraged to see they reopened 2011 comments period on

social media, political exercising after these revelations. however, i am still concerned about the problem within that have led to the years of gridlock and inaction. we cannot continue waiting for action from the ftc. our adversaries have shown they can act quickly and exploit our inability to enforce the law. according to the recent poll, 60% of americans want regulation on social media advertising and an astonishing 78% of americans want payment disclosure for political advertisements. i couldn't agree more. it's clear that americans want transparency and more accountability for social media, political advertising. congress and the intelligence community needs to fully investigate what happened in 2016. i commend the chairman for his leadership and willingness to hold today's hearing. congress must work harder to ensure the integrity.

recently senators warner, klobuchar and mccain and representatives introduced the bipartisan aid. this would increase transparency in online political advertising by requiring online advertising platforms to disclose copies of the ads to targeted audiences. this bill is a great start thank you to the witnesses for being here today i look forward to hearing your thoughts and ideas on how we can protect our democracy. thank you mr. chairman i would also ask unanimous consent that the representatives be allowed to join our subcommittee today and participate in the hearing. >> so ordered. >> thank you ranking member kelly and now we will introduce witnesses. first we have the legal director of the center for competitive politics. mr. david to chief executive che

officer of news media alliance, jack goodman order of the law offices, randall rothenberg president and chief executive officer and the advertising bureau and senior counsel for the brennan center for justice democracy program at the new york university school of law. welcome to you all and pursuing all witnesses will be sworn in before you testify so please rise and raise your right hand. do you solemnly swear or affirm the testimony you are about to get is the truth and nothing but the truth so help you god? let the record reflect all witnesses answered in the affirmative. in order to allow time for the discussion, please limit your opening testimony to five minutes and your entire statement will be made part of the record, and i appreciate those statements.

it was helpful and better understanding these issues for those that are looking for any great outline of these questions we will be debating here and i would suggest you go to the oversight website to review the statements. as a reminder, the clock in front of your shows your time remaining. a delightful turn yellow when you have 30 seconds left and read when your time is up. you are up first and you are recognized for five minutes. >> members of the subcommittee, thank you for the invitation to appear before you today. the internet has fundamentally transformed the way in which he communicate with one another. it is on our desks next to our alarm clocks and today a large

portion walk around every day carrying devices that can instantly connect them with anyone in the world from almost anywhere. in fact in 2014 supreme court survey data indicating 12% of americans use their cell phones in the shower. internet revolution allowed americans to absorb and produce and distribute content without third-party intermediaries. they no longer need to see if an editor accepted the letter were at the expense and burden of buying political ads. as the judge observed when he struck down the finance law it must be remembered that the internet is the new soap box and town square. in a way that makes the 1980s revolution publishing appeared almost claimed the internet has made publishers, distributors and speakers. every american has the opportunity and one suspects

those offers would approve. accordingly the blossoming of the association is delegates and great caution must be taken when burdening the association for the american speakers. that does not mean as i explain in my written testimony about online speeches are without rules, but it does mean the current regulatory environment strikes a balance in favor of a flourishing civil society. further efforts to license or regulate the placement of the issue advertisements, particularly those that do not advocate for any electoral outcome will drive out the least sophisticated and they will inevitably affect the corporations to ensure compliance but rather a grassroots activists passionate about the issues today. efforts to shift onto the online

platforms will simply require the companies to pass on the cost to the same budget consumers and it will create incentives to limit the grassroots speakers in favor of the entities that conduct the speeches and advanced. the result will be less free, less open and less available to ordinary americans. there's also challenges to take one example they are a valid and vital concern that they cannot justify regulations whose burdens will fall overwhelmingly on americans. that determines if a familiar problem. it has accomplished through the means of diplomacy, counterintelligence and military readiness. campaign finance law and particularly the possibility of a fine in the civil enforcement authority has relatively little to the mix.

additional rules will further restrict access to the internet by average americans in small groups. the first amendment stands against those efforts. it is against those of the moment and remind her that the dedication to liberty and unfettered public debate is a strength and not a weakness. nor does the technological advancements changed the fundamental guarantees the rights to frerightto free speecd association are not circumscribed merely becomes to become easier for the americans to exercise. as always than when dealing with political speech the supreme court has recognized to be at the center of our guiding principle must be restrained. thank you and i look forward to the subcommittee questions. >> you are now recognized for your opening remarks.

>> thank you for asking me to participate in today's hearing. i represent the news media alliance a nonprofit association representing 2,000 publishers across the united states. our members include some of the largest global news organizations as well as local newspapers, focusing on the issues that impact their daily lives of citizens in every state and congressional district. members share a common mission to inform society in an accurate and responsible manner. the organizations long made substantial investments in high-quality journalism to achieve that mission. our journalists and publishers are also held to high standards as detailed in the society of sf news editors and principles and professional journalists code of ethics. not only are we potentially liable for publishing something false but our brands are built on trust with our readers and because of this, the commitment

to the reporting has also informed our approach to advertising. publishers have long played an important role in ensuring the integrity of the advertisements that appear next to their content and when it comes to political advertisements, the responsibility for complying with the commission rules clearly falls on the advertiser. nonetheless, news publishers have taken a role to ensure proper disclosures are made and that all ads placed reflect the honesty and integrity of the foundation of the brand. as technology has evolved, evo , publishers carried forward the responsibility to provide accurate content and the internal controls to go with it to digital product. these efforts are now much were difficult because of the growth of online platforms like google and facebook that act as intermediaries in the distribution of news, content and advertising. publishers previously worked to ensure the integrity those of theiof theircontent and advertit appeared next to it, but now we

have less control over advertising this week because of the ads in the platforms. these challenges are largely caused by the massive growth and inability to control the ecosystem that was built with a specific intention of not exercising the responsibility over the integrity of content or the advertising that sustains the foundation. this is exacerbated to the by the online news information. they are the top sources of traffic for online news publishers and they also collect most of the revenue with google and facebook receiving approximately 71% of all digital advertising dollars in the united states last year which includes political advertising. the publishers worked tirelessly to respond to the rapidly changing business models and the members now represents some of the most innovative and engaging digital publishers in existence and we've created these new businesses without compromising

the integrity of the journalism. it's time google and facebook and other platforms do their part as well and while they profited greatly from the market power, they have yet to accept the responsibility that comes with that position. but it comes to political advertising congress also needs to make the same adjustments. on desktops, print, mobile devices if congress sees fit on certain speech those who shouldn't be defined by the delivery platform and as a corollary they should revisit the need for the current platform specific requirements to see if they appropriately applied to the converged digital world. if congress continues to legislate by platform, then technology will simply continue to outpace the rules.

the alliance believes that the rules should be updated to require disclosures within an internet advertisement to identify the sponsor, google and facebook should also update their models and be algorithms that accelerate the distribution of the so-called fake news and viral messaging so that the reputable content is elevated in the search and news feed. i believe that these changes would lead to a healthier industry, better informed citizenry and more united country. thank you very much for your time. >> mr. goodman and yo kunar recd for five minutes. >> enqueue ranking member kelly and members of the subcommittee. i am pleased to present testimony on political advertising though i have decades of experience working with broadcast stations from the political advertising i do not appear today on behalf of any president or former client and

these views are entirely my own. broadcasters have been considered america's most front source of news, far more than any other meme however broadcast advertising involving politics is subject to detailed regulations in effect at stations must accept, the information about sponsors they must obtain and disclose to the public and the price they charge for political ads. in my experience, stations take the compliance efforts very seriously. the political broadcasting staff is exceptionally helpful that even experienced broadcasters and the council frequently encounter questions to which no clear answer exists. disclaimer as i will refer to it is information that must be included about the sponsor these are often referred to as sponsor requirements, they are the sponsors of political advertising to reveal who they are and who determines the policies.

both the ftc and the fcc have rules governing aspects of both disclosure and disclaimer. both agencies have sought to avoid a conflict in regulations and very importantly, both believe that the broadcasters and their employees shouldn't be required to serve as unpaid agents or unofficial private in estimators. the fcc disclaimer rules for all political advertising is it must include a statement saying either paid for or sponsored by whoever is actually writing the check and paying for it. the rules limit the type of ad stations can so. short messages cannot be used because the the disclaimer willt fit, thus inflexible disclaimer rules can prevent the use of some formats for political speech. turning to disclosure, broadcasters and cable systems must maintain public inspection titles including the political file. television station files are now

online and all stations will have their files online by next march. for the candidates in the station required to disclose the candidate, the requested schedule and cost of the ad. disclosure requirements for the long candidate ads that include both independent expenditures relating to the elections are more complex. the rules require detailed disclosure for any ad communicates a political matter of national importance and explains that these include references to the legal equal the five candidate and election for federal office or national legislative issue of public importance and its definition is to say the least unclear. for example there's the reference to the legal equal to five candidate intended to encompass issue ads about state and local races, determining what is a national legislative

issue can also be challenging if congress is considering a gun control bill, separate gun measure were introduced in the state legislature would be and be subject to a expanded disclosure, the requirements disclose the sponsors officers and issues are also difficult to enforce. some ad agencies refuse to provide requested information. stations in frequently receive orders for ads that did not identify any individual or even if the station insists only one name. stations face similar problems getting accurate information about the issues. the rule is itself ambiguous for example, if there are issues ads next year opposing senator cain's reelection in november, the election of senator cain is that an adequate description of the issue and what is an avid discusses more than one issue, does each one need to be disclosed? another problem in advance and other times it isn't to decide

which specific issue to address until just before it runs. because the problems come even the most conscientious stations have great difficulty obtaining the information and opposing to be in the political file. in conclusion experience with the political broadcasting wearables as instructe instructe new ruleany newrules applicables or other media need to be flexible to be adapted to the new varying speech formats and if the disclosure requirements are created, the responsibility for the collection should be placed on the media but instead on a government agency with authority to interpret the rules, investing resources and the power to impose the sanctions for noncompliance. thank you very much. >> thank you mr. goodman. you are now recognized for five minutes. >> members of the committee, thank you for the honor to testify today. i would like to get straight to the point. throughout my eve o of an year tenure the active bureau has

always stood for greater transparency and disclosure in the digital advertising supply chain. regardless whether they are political or commercial because we believe transparency and disclosure are necessary for the consumer safety so we strongly support efforts by the congress and federal election commission to clarify, reconcile and strengthened the disclosures required in the party's candidates and campaigns. but, as a representative of the economy's fastest growing sector, i also believe that our industry itself can go even further to implement supply chain protections that would fortify the trustworthiness of the digital advertising and the media and political advertising and commercial advertising alike. there's a proven track record of taking and implementing responsibility across the 650 plus member companies together

with multiple partners associations, we've created some of the media industries strongest sulfur to three mechanisms. programs lauded by the white house, commerce department and federal trade commission. for the digital advertising alliances program we've provided consumers more control over the personal data into digital advertising environments through the trustworthy accountability groups anti-fraud registry and auditing program we work closely with u.s. and overseas law enforcement to root out criminal activity from add supported internet. ..

>> the federal election campaign act has mandated disclaimers on all political advertising that expressly advocates the election or defeat of a candidate. but much of the fake news and fake ads at the center of the current storm did not engage in such overt candidate support. there were not a bunch of secretive russian moles purchasing vote for trump or hillary for president internet banner ads. rather, there were sophisticated posts about social and political issues, some of which were made more widely available because the operators paid to amplify them in people's social media feeds. some of the scandalous messaging was not even placed for payment. both social influence advertising and unpaid advocacy fall outside the scope of federal campaign disclosure rules. americans have first amendment rights to shout on street corners, put signs on their lawns and post on social media without registering as political

committees or reporting how much they spend on megaphones or smartphones. there is one more complex challenge is extending current disclosure rules to the internet. the traditional regulations from the fec and the sec require disclosures by the media running the ads for they are receiving the insertion orders and payment for those ads. no programming runs that hasn't been vetted by those companies. in the digital world, every page is cobbled together from multiple sources and assembled on the fly inside a user's internet browser. sponsored links and social commentary come together from scores of computers. scores of other suppliers may be contributing measurement, ad verification and auction pricing services. only a portion of the advertising is sold directly by publishers. the greater portion is sold and