Washington takes aim at Big Tech


If there was ever a piece of no-brainer legislation that should be passed by Congress, it is the Honest Ads Act put forward last week by US senators Amy Klobuchar, Mark Warner and John McCain. This bipartisan group is asking for online political advertising to be subject to the same rules of disclosure as ads on television, print, and radio. The idea is to make sure that foreign nations like Russia cannot use platforms such as Facebook, Google or Twitter to influence US elections, as they did in 2016.

The legislation is necessary for three reasons. First, it would even the playing field between platform companies and the rest of the media industry. This is long overdue. Google and Facebook together take roughly 85 per cent of all new digital advertising revenue. For years, they have come up with absurd excuses for why they should not be subject to the same rules as everyone else (online ads are too small to include disclaimers; it is too tough to figure out if ads are commercial or political, and so on).

Their reasoning does not hold water. These businesses have traditionally been just fine using the smallest of small print on privacy policies, so it should not be too much trouble to do the same thing with political disclosures. And if it is too tough to figure out what is political, play it safe and disclose everything.

Of course they do not want to do that, because opacity is a key part of what political operatives are paying for. That is reason number two that this legislation should pass — it would go some way towards cleaning up dark money and influence in politics.

Online advertising is hyper-targeted. That is the whole appeal. We get to see things that are meant for our eyes only. Rather than clear, broad messages that are put where everyone can see them, online advertising can play to the deepest fears of individuals, allowing them to be exploited with divisive or hateful messages that could be much more easily called out and debunked if they were, say, being shown on national TV or in a print advertisement in a major paper.

Indeed, as one political insider put it to me, it is not just the Russians, but our politicians themselves who want to keep their advertising in the dark. Consider, for example, the Trump campaign’s xenophobic pre-election posts on Facebook. The US president is somewhat singular in that he does not seem to mind openly dog-whistling. But others might well be deterred from taking the low road if they could be openly named and shamed for doing so.

The third reason the Honest Ads Act should pass is it would be a step towards reframing the regulatory debate around Big Tech. Large and powerful industries and companies that enjoy monopoly rents often like to portray themselves as “special” or “different”, and thus in need of a separate set of rules.

After a time, this idea of a separate playing field gets normalised. Monopolists also use complexity to obfuscate clear debate about what they are actually doing, and whose interests they are serving. I cannot tell you how many conversations I have had with fast talking financiers — and more recently, technologists — who try to throw as much jargon against the wall as fast as possible to see what sticks.

Yet the best questions are often the simplest ones. In the case of the financial sector, it was and remains: “What is the industry doing that is good for the real economy, versus what is good only for the financial industry?” We await a clear answer there. In the case of Big Tech, we might start with the question: “Are you playing by the same rules as everyone else, and if not, why not?”

The answer to the first question is clearly no. I hope that the Honest Ads Act will pass, and that lawmakers will move on to examining Section 230 of the Communications Decency Act of 1996, which says that platforms are not responsible for what their users post.

It is a get-out-of-jail free clause which has protected the industry from all sorts of legal issues that most businesses deal with every day, and is as outdated and unfair as the loopholes around political ad disclosure online.

Regulators should also look a lot more carefully at whether the M&A practices of the tech titans are anti-competitive. Consider Facebook’s recent purchase of tbh, a polling app aimed at teenagers, on which 5m users have posted 1bn questions since its launch three months ago.

As Matt Stoller, a fellow at the Open Markets Institute, a think-tank, tweeted: “Facebook is buying a competitor that undercuts its data-harvesting business model. FTC [the US Federal Trade Commission] should block this merger.”

I also hope that lawmakers will begin to educate themselves more thoroughly about the 21st-century digital economy. There are a handful of politicians who have done so. But not many.

I recently asked one high-level software developer from a Big Tech company, someone who frequently visits Washington, to rank technological understanding among not only Congress members, but among the Capitol Hill staffers who brief them. On a scale of zero to 10, he put that understanding at “negative 10”.

That is great for his company. But it is dangerous for the rest of us, because understanding Big Tech is now crucial to understanding not only politics, but the economy at large.

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