Regime Change Afoot?
Regime Change Afoot?
After private meetings with Google and Facebook, Washington State regulators may alter the rules of the political ad game
“Washington’s onerous regime,” as Facebook has called it, may be headed for a change after a series of private meetings between tech giants and state officials charged with regulating them. The regime in question: a system of laws and rules that make up the country’s most stringent disclosure requirements for online political ads.
Facebook is trying to get this unique disclosure regime struck down by a Seattle judge because, in the company’s view, it requires Facebook to know too much and disclose too much about the political ads it sells, a supposed violation of Facebook’s First Amendment rights. Google, which last week stepped back from a similar court battle against the regime, believes it can instead “work collaboratively with Washington State regulators” to “reform” the state’s disclosure rules.
Why would Google, which until last week was facing a lawsuit triggered by the regime’s enforcers at the Washington State Public Disclosure Commission, have come to believe the commission will now turn around and alter the rules it’s been telling Google to follow?
“It appears that they’ve gotten that impression from our executive director and possibly members of the commission,” said Russell Lehman, one of the PDC’s four governor-appointed commissioners.
The PDC confirmed that its executive director, Peter Frey Lavallee, met twice in March with a team from Google to privately discuss political ad regulation. Google’s team for those meetings included lobbyists and a digital ad expert from the company, as well as David Kramer, an attorney who represented Google in the lawsuit the PDC had triggered over Google’s failure to follow current political ad disclosure requirements.
While Google’s private meetings with Lavallee and other members of the PDC’s executive team were playing out, the company asked for its first extension of a deadline for filing its response to the lawsuit. The Washington State Attorney General’s Office, which was prosecuting the case, agreed to that extension plus three more extensions Google later received, including one in early May, around the same time Google was sending the PDC leadership a detailed outline of its proposed changes to existing disclosure rules.
A few weeks after that, Google made the decision to bring the case to an end with a $400,000 payment. That settlement was negotiated and approved by the AG’s office, but by law Google’s money will end up in the state’s Public Disclosure Transparency Account, which funds the Public Disclosure Commission.
A team from Facebook also had two private meetings with Lavallee earlier this year. Those meetings were called to discuss “the state of political ads in Washington” and they included Rob McKenna, the Republican former Attorney General of Washington State and current lawyer for Facebook. McKenna is presently representing Facebook in its fight to strike down what the company’s court filings have dubbed “Washington’s onerous regime.” Also present for the Facebook meetings: the current Chair of the PDC, Fred Jarrett.
What was discussed when the PDC leadership had its private conversations with Facebook and Google?
Kim Bradford, a spokesperson for the PDC, said the focus was on improving the current disclosure process, which has been gummed up by Facebook and Google’s repeated failure to comply. The meetings also covered potential creative solutions to what Facebook and Google have presented as impossible-to-solve compliance problems generated by Washington State’s current rules. “In each of these discussions,” Bradford said, “we agreed up front that the conversation was separate and distinct from the ongoing litigation.”
But the disclosure system at the core of the ongoing litigation was the reason the meetings were called in the first place, and based on internal PDC dialogue, Commissioner Lehman told Wild West he has come to a different understanding of what the private talks with Google and Facebook entailed.
“It’s been conveyed to me,” Commissioner Lehman said, “that discussions with both Google and Facebook included—and include—the possibility that the Public Disclosure Commission would change the rules to accommodate their needs.”
Bradford responded: “PDC staff have made no promises to Google or Facebook that we could ‘accommodate their needs.’”
However, Bradford said that this Thursday, the PDC leadership plans to ask its four governor-appointed commissioners to begin a process that could lead to changes to the political ad disclosure regime.
The four private meetings earlier this year between tech giants and PDC leadership all involved sophisticated political operators and attorneys, and there’s a lot that can be suggested in such settings while simultaneously making “no promises.”
So Wild West asked Google whether, during the meetings, it had been given any indications by PDC leaders that they shared Google’s goal of changing Washington State’s political advertising rules. Google did not respond to the question.
Wild West also sent the following question to Bradford, the PDC’s spokesperson: “If Google got the impression that Peter Lavallee thinks the current political advertiser rules should be changed, would Google’s impression be wrong?”
Bradford did not directly answer.
Instead, she pointed to certain parts of the current disclosure system Lavallee supports. The system has many parts, however, and once it’s opened up for official revision they all can change.
The specific rules that have fueled this long-simmering bureaucratic and legal drama require digital platforms to reveal, upon request, detailed information about the purchasers, financing, and targeting choices behind all online ads aimed at Washington’s state and local elections. The most recent iteration of these rules was unanimously adopted by the PDC’s commissioners in 2018, when Anne Levinson was chairing the commission. Levinson, a former judge and longtime good-government watchdog, took an activist view of her role, seeking to make the PDC a national leader in online political ad regulation and supporting the adoption of strong new disclosure rules despite strenuous objections from lobbyists for Google and Facebook. In the wake of the new rules’ arrival, both Google and Facebook ended up banning political ads in Washington State in an attempt to avoid their requirements.
Since that time, Lavallee’s record defending the rules has been mixed.
In an internal email to PDC staff and commissioners last week, Lavallee, a lawyer and former Wall Street investment banker, said he was “disappointed” by the attorney general’s willingness to end the Google lawsuit with a deal that lets Google to pay a fine “without conceding” that Washington’s disclosure regime can even be enforced against the company.
However, as the AG’s office reminded Wild West after the the last edition of this newsletter reported on Lavallee’s comments, Lavallee himself was presented with similar rule-breaking and law-questioning behavior by Facebook in 2019. In response, he promoted a settlement in 2020 that would have allowed Facebook to avoid any admission of guilt for failing to make required disclosures about hundreds of ads it sold targeting Seattle’s City Council elections. The settlement Lavallee backed would have involved a $75,000 fine, which the AG’s office pointed out is “less than one-fifth of what we ultimately secured in our Google case.”
At the time, experts in campaign finance law and digital ad transparency reacted to Lavallee’s proposed Facebook deal by calling it “dangerous” and “troubling,” and the PDC’s commissioners unanimously voted to scrap the proposal. Instead, under the leadership of a new commission chair, the former Associated Press journalist David Ammons, the commissioners unanimously referred the case to Attorney General Bob Ferguson for potential prosecution. That move led to the present AG lawsuit against Facebook.
The PDC now has yet another new chair, Fred Jarrett, a former state lawmaker and leader at Boeing. Last week, for the AG’s press release announcing the Google deal, Jarrett offered a quote praising the AG’s “efforts to defend the public’s right to know about political advertising” and lauding a “continued partnership” between the two agencies that “ensures Washingtonians enjoy robust disclosure of political spending.”
But if the PDC, under the leadership of Lavallee and Jarrett, now moves to change those robust disclosure rules, will the changes end up undercutting the attorney general’s ongoing lawsuit against Facebook?
A trial in that case is now set for December and allegations of rule-breaking will be at its heart. If the very rules Facebook is accused of breaking end up being changed before or during that trial, what happens?
The AG’s office didn’t respond to these questions.
The leaders of the PDC should be in dialogue with the communities they regulate, and that includes giant “commercial advertisers” like Facebook and Google. As Bradford explained it, “Staff has been talking to campaigns, experts and providers for the past year, and we’ve heard concerns about the rules from a number of sources. Putting the commercial advertiser rules on the rulemaking agenda is a way for the Commission to begin assessing those concerns and hearing from the public.”
But in response to additional questions from Wild West, Bradford admitted that “rulemaking is not the only way to solicit public input.” In other words, the commission need not begin the process of changing the rules—which assumes the rules need to be changed—before asking the public what it thinks. The PDC exists to defend the public interest and promote confidence in the democratic process, and Bradford also admitted that when thinking about the actual number of sources that have complained to the agency about the current political ad disclosure rules, “It is fair to say that Facebook and Google have been the most frequent critics.”
Still, Bradford said, “We have compliance issues.” What are those issues, exactly? “We have commercial advertisers that are not complying with the disclosure law, as is well documented in the enforcement cases that have come before the Commission and gone to court.”
The thinking of the PDC’s previous chairs seemed to be that if there were compliance issues, then the way to resolve those issues was to force the non-compliant parties—in this case, Facebook and Google—to either start complying or face legal action. Now, in the wake of those private meetings with Facebook and Google, and following AG Ferguson’s second settlement with Google in three years, a different perspective seems to be asserting itself. It’s a school of thought that appears to be saying: If there are compliance issues, maybe we should change the rules rather than wait to find out what happens when they get enforced in court.
Rule changes at the PDC don’t happen at light-speed. If the rule-making process is indeed opened this Thursday, it could still be six months—that is, December, the month of the scheduled Facebook trial—before any approved changes actually take effect. And all of those changes would have to be voted on by the agency’s commissioners.
Bill Downing, a former judge who now serves as one of those commissioners, said he is “not a party to any of the discussions that have been going on.”
But, Downing added, “Continued refinement and revision of the rules is essential to keep pace with the technology and evolving campaign practices. Any change that occurs to the rules, I’m confident, will be done with a view toward increasing the amount of information and the timeliness of the information made available to the public.”
Some of the stories I’ve been reading this week:
• Meet Lina Kahn — The Big Tech critic who last week became the new chair of the Federal Trade Commission in a strikingly bipartisan vote.
• A notable U-turn at Google — “When [Google] made it simpler to halt digital location tracking, far too many customers did so,” Greg Bensinger writes. “According to recently unredacted documents in a continuing lawsuit brought by the state of Arizona, Google executives then worked to develop technological workarounds to keep tracking users even after they had opted out. So much for the customer always being right.”
• Inside Amazon’s high-turnover warehouse workforce — A must-read report in The New York Times.
• Always worth diving into threads from Renee DiResta, including this new one on tropes:
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