Meta fights $35 million penalty over Washington’s political ad law

OLYMPIA, Wash. (CN) — In a challenge to its $35 million judgment for violating Washington’s political ad disclosure rules, Meta appeared before the state’s highest court on Tuesday to argue that the rules are unconstitutional.

“When the state imposed burdensome new requirements for disclosure on the digital communications platforms in 2018, it caused a key political speech forum to be closed down in our state,” said Robert McKenna, a Seattle-based attorney representing the social media giant. McKenna said the law prompted several major platforms — not just Meta — to ban Washington political ads.

Under the state’s Fair Campaign Practices Act, social media platforms are required to maintain records of the political ads hosted on their sites, such as the cost and sponsor of the ad and information about ad targeting and reach.

In 2020, the state sued Meta over violations of that campaign finance law after several residents reported the company wasn’t providing complete information about political ads in response to their requests. The King County Superior Court ruled in favor of the state, imposing a $35 million fine for 822 violations, and the Washington Court of Appeals upheld that ruling last December.

But Meta argues that the law is onerous and effectively infringes its First Amendment rights by chilling its free speech.

Five other states have similar campaign disclosure laws, but four require that the political actors — politicians, campaigns, political action committees — provide the information to the platform rather than burdening the platform with providing it all itself, McKenna argued.

“So are you saying Meta is incapable of providing it?” Washington Supreme Court Justice Helen Whitener asked.

“I’m saying it’s extremely burdensome to provide it,” McKenna responded.

Whitener pushed back on what exactly makes it so burdensome for Meta to comply with the law. McKenna explained that requiring Meta to identify which ads may fall under the law is expensive due to the system of machine and human review that the company must create, and it isn’t worth it to the company.

“The whole advantage of digital advertising of these digital ads is they’re cheap and they can be highly targeted, so you reach the people you’re trying to reach,” McKenna said. “But creating this system to produce the ads upon request is very expensive relative to that revenue.”

So major platforms have opted to ban Washington political ads to avoid the burden, McKenna said. Digital platforms aren’t required to carry political ads, unlike TV stations, which the FCC requires to carry political ads.

However, the state painted a different picture, one in which the world’s largest social media company simply refuses to meet Washington’s disclosure requirements, despite maintaining the information.

“The law serves the vital purpose of ensuring Washingtonians know about efforts to influence their votes,” said Cristina Sepe, Washington’s deputy solicitor general. “This purpose is even more urgent today, given the targeted and ephemeral nature of digital media. Yet Meta has repeatedly and intentionally violated our law.”

While Meta may argue that the burden should fall on political actors to provide all of the requested information, the state asserted that Meta holds unique information of interest to voters, like the reach of the ad or how many times an ad appeared on users’ screens.

“There’s no dispute here that Meta maintains that information in their ordinary course of business,” Sepe said.

Justice Barbara Madsen asked the state whether its law unfairly burdens Meta by forcing it to decide which ads count as political and what happens if it misclassifies an ad.

Washington argued that the Public Disclosure Commission could review if such an instance arose, but argued that wasn’t the issue in this case, as Meta intentionally withheld information about certain ads rather than making simple mistakes.

“The law, with respect to digital advertisers, doesn’t force them to maintain that information if they don’t maintain it in their ordinary course of business,” Sepe said. “And here there’s no dispute as to Meta that they maintain information, with respect to targeting on demographic information like age, gender or location.”

But Justice Sheryl McCloud pressed the state on whether the record clearly shows that the law doesn’t place an undue burden on Meta.

“I’m not saying they’re right, I’m not saying you’re right, I’m saying that on every issue … I saw conflicting statements,” McCloud said.

Washington pointed to the ad library that Meta maintains, which it said can be easily tailored to meet the requirements of the law. Meta maintained that the state was overburdening the company.

“[The state] must instead demonstrate its need for its disclosure regime in light of less intrusive alternatives,” McKenna said. “The state here has never done that. It has never explained why less intrusive alternatives will not work to achieve its stated purpose.”

The Washington Supreme Court did not indicate when it would rule.