Media Ownership Impacting Disinformation

When it comes to combatting disinformation, one of the primary tools that national governments and regulatory bodies have available is regulation over foreign ownership of media outlets. Malign actors frequently attempt to utilize such media outlets to disseminate disinformation and propaganda. Regulation over the ownership of media outlets can reduce the ability of foreign governments to successfully distribute such messages.

Domestically, oversight and jurisdiction over the ownership of media outlets falls to Congress at the legislative level, and the Federal Communications Commission (FCC) and the Department of the Treasury at the executive level. Below is a quick summary of some prominent, recent actions within both branches of government.

Pending Legislation on Media Ownership

While Congress has held hearings on disinformation over the last several years, there have been relatively little viable legislative attempts to create solutions to combat disinformation. The most current attempts from lawmakers have come in the form amendment language into the annual defense bill.

As of late July 2020, Congress is locked in discussions on The National Defense Authorization Act (NDAA) for 2021. The NDAA is the annual, comprehensive legislation that authorizes funding for national defense programs across the country, including setting the budget for the Department of Defense and other peripheral agencies that handle matters of national security. In the current House of Representatives draft, many Members of Congress are making a bipartisan push to include funding for the national security apparatus to combat disinformation.

Similarly, in the Senate, one of the most important of the proposed provisions surrounding disinformation in the Senate Committee on Armed Services version of the NDAA would require foreign media outlets, specifically media outlets in which a foreign government or foreign individual has a minority stake in the business holding, to register under the Foreign Agent Registration Act (FARA). Under this provision, these outlets would have to inform consumers of their FARA status. This amendment was accepted into the Senate version of the NDAA and is likely to receive support when both the House of Representatives and the Senate enter the NDAA reconciliation process.

According to the sponsors in the Senate, the push to have this provision included in the NDAA stems from the Intelligence Community’s assessment of Russian interference in the 2016 U.S. election.

The sponsors, Sen. John Cornyn of Texas, Sen. Kamala Harris of California, Sen. Richard Blumenthal of Connecticut, and Sen. Ben Sasse of Nebraska, argue that the bipartisan Report of the Select Committee on Intelligence United States Senate on Russian Active Measures Campaigns and Interference in the 2016 U.S. Election found that Russia-controlled media outlets are crucial to Russia’s international propaganda push to destabilize legitimate government institutions of regimes they deem as geopolitical enemies.

Some social media platforms have already begun requiring this kind of labeling. YouTube, for example, forces media outlets to include information regarding any affiliation to a government entity. This includes the U.S. federal government. Just as foreign media outlets, such as Russia’s RT, have to display a permanent banner on their videos indicating their affiliation to a foreign government, American companies like PBS must do the same with their affiliation to the U.S. government.

Latest Executive Branch Actions on Foreign-Owned Media Companies

The Executive Branch has also been active over the last several years on the evolving nature of foreign ownership of U.S.-based media companies. Both the Federal Communications Commission (FCC) and the Department of the Treasury have jurisdiction over the ownership component of media organizations within the United States. While the FCC has been more open to allowing further foreign ownership of media companies, the Department of the Treasury and the Department of Commerce have bolstered their efforts to screen those ownership transactions to ensure that the transfers comply with national security guidelines.

Federal Communications Commission: Although the policy was never codified, the FCC has historically operated with the unspoken rule that it would block foreign ownership over 25% of any U.S.-based media company. However, in 2017 the FCC signaled that it would continue Obama-era guidance that would approve takeovers by foreign actors. This decision was reaffirmed in June 2020 when the FCC approved Cumulus Media’s post-bankruptcy request to give up 100% ownership to foreign entities.

Cumulus Media is an American broadcasting group and the third largest owner of radio stations across the country. The media group, which filed for bankruptcy in 2017 after missing interest payments on bonds and suffering declines in ratings and revenue due to competition from digital streaming and web-based formats, was requesting to bring on foreign capital in order to keep the company financially solvent.

Department of the Treasury: Within the Department of the Treasury is the Committee on Foreign Investment in the U.S. (CFIUS), tasked with having oversight over foreign ownership of American companies and enterprises operating within the United States. From a national security standpoint, CFIUS has begun to bolster the screening of foreign direct investment coming from China. It has also started enacting policies that make it more difficult and cumbersome for both Chinese state-owned corporations and individual investors to purchase stock in the United States. According to the United Nations Conference on Trade and Development Investment Policy Monitor Report in December of 2019, these reviews have included a great number of Chinese foreign nationals and corporate entities looking to take a stake in a U.S.-based media company.

Conclusion

Globalization has, of course, vastly reshaped the way Americans consume news and information. Media companies and the federal government have been forced to respond to new and evolving pressures. Both Congress and the Executive Branch have been active over the last several years in addressing the evolution in media, and more action is being actively discussed. However, with the threat of disinformation continuing to grow, regulation of foreign ownership of U.S.-based media companies is quickly becoming one of the most important topics when it comes to the government’s toolkit for combatting disinformation.

This product was created by a team of graduate students from American University’s School of International Service. The work herein reflects the team’s research, analysis, and viewpoints.