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The 2020 U.S. presidential election campaign is in full swing and there is every reason to expect that it will be waged largely on Facebook.

Despite an intense global backlash sparked by the misuse of its platform during the 2016 U.S. presidential election, Facebook is doubling down on its role as a central player in this year’s race.

Earlier this month, the social-media giant confirmed it would not fact-check or otherwise limit political campaign ads – separating itself from competitors such as Google, Snapchat and Twitter, which have all announced at least some restrictions on paid political messaging.

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Presidential campaigns are responding. President Donald Trump has spent more than US$21-million on Facebook ads so far this election cycle. His Democratic challengers have collectively spent nearly US$67-million. And election day is still nine months away.

Yet the importance of Facebook to modern political campaigns has also become a double-edged sword, attracting political interference and partisan fake news alongside divisive political campaign ads.

Facebook is gambling that it can manage all of those risks in an election campaign in which as much attention is likely to be focused on the role of social-media companies in swaying the outcome as on who wins the White House.

It’s a risky proposition. Getting it wrong means not only the prospect of a damaging regulatory backlash for Facebook, but the potential to imperil the future of democracy itself.

On one hand, Facebook may have little choice. While several Democrats have expressed outrage at the social-media giant’s political-ad policies, Facebook has become hugely important to U.S. political campaigns – Republican and Democratic alike – which flock to the platform to raise funds, build lists of supporters and test out hyper-targeted advertising messages.

Mr. Trump is by far the biggest political advertiser on Facebook in the United States. If Facebook were to start restricting political ads, the company would likely incur the wrath of Mr. Trump and his supporters, many of whom already believe that tech firms are conspiring to silence conservative voices.

The Trump campaign’s savvy digital campaign on Facebook was central to the President’s successful election in 2016 and may help get him re-elected this year, Facebook executive Andrew Bosworth wrote earlier this month in a leaked memo that he has since posted publicly. But, he argued, “if we limit what information people have access to and what they can say then we have no democracy at all."

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One thing that both Facebook and its critics seem to agree on is that the company is not taking its stand on political advertising because of the money. Facebook estimates that political ads represent roughly 0.5 per cent of its total revenue – a drop in the bucket for a company on track to bring in more than US$70-billion in 2019.

“I can assure you, from a business perspective, the controversy this creates far outweighs the very small percent of our business that these political ads make up,” Mr. Zuckerberg told analysts in October. He argued that a ban on political advertising would hurt lesser-known political candidates and those without the funds to pay for expensive television and direct mail ads.

Roger McNamee, an early Facebook investor who has since become one of the company’s most outspoken critics, sees a different motivation. “They realize every campaign needs them for fundraising. Every campaign needs them for messaging,” he said. “They do it because it gives them massive political influence.”

Eric Wilson, a Republican digital strategist who led the online campaign for Florida Senator Marco Rubio’s 2016 presidential bid, doesn’t disagree. Facebook and Google together control more than 60 per cent of the online ad market. “Like it or not, campaigns have to engage,” Mr. Wilson said. “We’re essentially held hostage to Facebook and how they decide to engage with elections.”

Indeed, while political advertising may be a fraction of Facebook’s total revenue, political campaigns are expected to devote a significant share of their budgets to social media in 2020 – with estimates that as much as US$3-billion will be spent on digital ads in the current election cycle.

Since May, 2018, when Facebook released its ad archive, U.S. political campaigns and advocacy groups have spent more than US$1-billion in ads, with Mr. Trump by far the largest spender.

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A New York University study that tracked political ads on social media for three weeks in September, 2018, found that Mr. Trump’s campaign ran nearly 10,000 ads on Facebook, compared with just 27 ads on Google’s network. The Trump campaign purchased no ads on Twitter, where the President can broadcast messages to his nearly 70 million followers for free.

Facebook argues that it has made several changes since 2016 that have better prepared the social-media company for this year’s election.

The tech giant has added thousands of content moderators, partnered with fact-checking agencies, de-prioritized posts from third-party publishers, required pages that run political and social issues ads to verify the advertisers’ identity and launched archives of political advertisements in several countries.

But one major challenge for Facebook and other social-media firms in 2020 is that the nature of online information warfare has changed significantly since 2016.

Behaviour once thought to be mainly coming from Russia is now being used by a broader set of actors looking to disrupt elections.

Researchers from Oxford University estimate that 70 countries were targets of social-media manipulation in 2019, up from just 28 in 2017. A widening array of countries, including China, Iran and Saudi Arabia, have tried to influence elections outside their borders – including in the U.S. – primarily through Facebook.

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An even greater challenge than machine-manipulated content is the blurring of lines between paid ads on social media and advertisers enlisting networks of supporters to informally promote political messages through their personal accounts.

Political campaigns now face disinformation efforts that are shifting away from attacks on candidates themselves toward content that aims to divide voters on hot-button topics.

Russian trolls targeted sensitive issues such as race relations during the 2016 election. But the focus on issues was even more pronounced during the 2018 midterm congressional campaign, said Lisa Kaplan, who worked on Maine Senator Angus King’s re-election campaign and now runs a consulting firm helping clients protect against online disinformation.

Voters last year frequently grilled congressional candidates on issues that had little direct connection to their local districts, but that were trending on social media, such as the controversy over NFL players kneeling during the national anthem to protest police brutality. “The question for campaigns becomes: Do I monitor conversations relevant to my candidate? Relevant to the key issues? Relevant to the key issues in every state? It becomes this overwhelming challenge,” Ms. Kaplan said.

For Facebook investors, who have largely brushed off the company’s controversies, the risks involved if the social-media giant gets it wrong again in 2020 are substantial. Some of the backlash has already resulted in regulatory actions. Last year, the Federal Trade Commission slapped Facebook with a record US$5-billion fine for privacy violations stemming from consulting firm Cambridge Analytica’s use of personal data.

Facebook and other tech behemoths also remain in the crosshairs of U.S. anti-trust investigators. And the company’s latest big bet – a global cryptocurrency called Libra – faces stiff opposition from lawmakers in the U.S. and Europe largely because of Facebook’s trust issues. A misstep in 2020 could provoke an even greater political response.

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With so much at stake, Facebook’s decision not to restrict political advertising during the presidential election has some investors worried.“If you think about the cost of legal challenges, the appearances before [Congress], and what I see as a huge risk in terms of getting it wrong again around foreign interference and taking foreign money … you would think that the risk would be greater than the reward for taking the advertising,” Julie Goodridge said.

As chief executive of Northstar Asset Management, Ms. Goodridge has submitted shareholder proposals calling on Facebook to end the dual-class share structure that has enabled Mr. Zuckerberg to retain voting control over the company, which she believes is at the root of many of the company’s controversies.

A regulatory backlash could hit Facebook to the tune of US$35 a share, Citigroup analyst Jason Bazinet estimated in December. The stock currently is trading at just above US$214 a share.

He predicted that if U.S. regulators do act, they are most likely to force Facebook to spin off its photo-sharing app Instagram, pass new national digital privacy laws that would hurt Facebook’s ad business and potentially even require the social-media giant to offer an ad-free subscription version of its platform.

Others see much more at risk than just the company’s share price. “I don’t think we can afford to be testing Facebook’s effectiveness through our national elections,” said Natasha Lamb, managing partner of investment firm Arjuna Capital, which has regularly submitted shareholder proposals asking Facebook to improve its corporate governance. “I think we’re putting Facebook before our democracy, frankly."

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