Navigating the Wild West of Online Campaign Finance: How Mexico and Belgium are Coping
International IDEA has just published new case studies on Mexico and Belgium as part of the ´Political Finance in the Digital Age´ initiative. The case study series examines the strategies, norms, and practices in relation to regulating online campaign finance in respective countries. While Mexico and Belgium are seemingly different jurisdictions, they face similar challenges, as do many countries across the globe. An analysis of campaign spending patterns in both countries makes it clear that while parties and candidates spend more on traditional tools, their spending on online campaigning has been growing over the years. There are also differences in where these two countries stand in terms of regulatory development, and adoption of mechanisms and procedures to ensure transparency of online campaign finance.
Mexico has, over the years, adopted innovative approaches to interpreting regulations, from defining what constitutes free speech, to placing accountability on political parties as ‘entities of public interest’, to ensuring transparency in financing reporting and enabling effective and independent oversight. In Belgium, societal debate on regulating political messages on social media platforms is ongoing at all levels of politics, although political parties have divergent views. The case study demonstrates that the main approaches to regulating party spending in Belgium are banning ads during election campaigns, placing spending caps on online advertisements, and advocating for an EU-level code of conduct for sponsored ads on social media platforms.
Guidelines shaping online campaign finance in Mexico
The Mexican case affirms that the effectiveness of a robust institutional regulatory framework is highly dependent on mechanisms on the ground for monitoring and cross-checking information provided by political actors. The case study highlights some of the distinctive features of the Mexican regulatory framework including the following:
Freedom of speech and free access to information
The Mexican Constitution guarantees the right to free speech and information in all mediums, including the Internet. It means that online political content published by individuals is unregulated while digital advertising by political parties and candidates is subject to regulations framed by the National Electoral Institute (INE for its Spanish acronym). Electoral authorities in Mexico have adopted some criteria to determine whether an online political message is subject to regulation: the costs of production involved, the timing of the message and the taxpayer status of those posting the message. In this way, Mexico uses bureaucratic means of interpretation to deal with a problem common to many.
INE´s authority to conduct meaningful oversight
The INE and other oversight agencies in Mexico are empowered to conduct inspections and hold political parties and candidates accountable. The 2007 constitutional reform further emboldened the INE and granted it the authority to investigate organizations and individuals outside of politics. Practically this means that INE has the right to validate the information submitted by parties and candidates with information that it collects itself including from third parties. This makes Mexico one of the few countries that are defining the rules for political parties and candidates to hire digital companies and social media influencers to engage in political advertising.
Price matrix of campaign items
INE has developed a price matrix with thousands of campaign items wherein they set market values of these items including digital tools. If the INE determines that an item not reported by political parties must be considered part of campaign spending, it uses its price matrix to calculate the cost of production and dissemination of the message and adds the estimation to the campaign that is benefitting from the messages. In Mexico, this was seen as an important intervention to avoid underreporting of campaign expenditures or bypassing regulations on spending limits.
High level of political finance transparency
Since 2014, political parties and candidates much declare all expenditures incurred on digital advertisements, including social media activities using an itemized expense list developed by INE. In addition, political parties and candidates must submit valid fiscal receipts for all advertisements published on websites and social media. These receipts must include the country of origin of companies contracted, dates of publication, e-addresses, the amount spent, the name of the candidate and the campaign that benefitted, and samples of the advertisement posted on the internet.
The constitutional responsibility of political parties
Given that political parties in Mexico use public money, they are considered ‘entities of public interest’. This means that political parties are held responsible for the actions of third parties if they are seen as beneficiaries of those actions. This can include private donors, digital companies, or social media influencers.
Towards middle-of-the-road approach in Belgium
Like Mexico, Belgium has, over the years adapted its legal framework to reflect the realities of modern-day campaigning. Prior to 2013, online ads were included in the list of prohibited campaign instruments owing to the great number of unknowns regarding the use and influence of this specific online campaign tool. However, in 2013, the restriction regarding online ads was removed and political parties and candidates were allowed to use (targeted) online political ads during concurrent elections in 2019.
Currently, several legislative initiatives proposed by the members of the Federal Parliament in Belgium are awaiting adoption. One of the resolutions refers to the need for more transparency and accountability on the part of social media and other platforms dealing with online content and information. It urges the federal government to appeal to the European Union for a code of conduct for sponsored political ads on popular social media platforms. This indicates that Belgian politicians are turning to the EU for new legislative initiatives on (targeted) political messages on the Internet. Another initiative proposes an annual spending cap of EUR 1 million per political party (including their MPs and party officials) on all political information dissemination activities and political ads, both online and offline during non-campaign period (there is already a spending regulation for the campaign period). This is intended not only for creating a more level playing field, but also to put an end to large sums of money spent on social media and other online and offline ads by political parties outside of the campaign period.
The two case studies provide lessons on how policymakers and oversight agencies in Mexico and Belgium are dealing with the challenges posed by digital aspects of political finance. Both these cases make it clear that regulating online campaign finance is not straightforward, and changing regulations to reflect current-day campaign realities requires, at a minimum, a broad political agreement among main political stakeholders. Moreover, regulations are not enough, they need to be complemented with transparency from political actors as well as social media platforms, strong technical capacity of oversight body to monitor and audit political finance reports, and effective coordination among different agencies.