"Fake news" is the label that has affixed itself to the efflorescence of political hoaxes that colonized Facebook and other social-media sites in the months leading up to the 2016 election. But maybe we should be calling it something else: covert campaign advertising.

The Intercept's Lee Fang last month traced the origins of various sites known for peddling misinformation about U.S. politics to "experienced political operators well within the orbit of Donald Trump's political advisers and consultants."

The creator of Romania-based misinformation site Ending the Fed, cited by Buzzfeed as responsible for four of most viral false election headlines on Facebook, told Inc. in November that he created the U.S. politics website with the intention of helping Trump get elected.

While some fake-news websites are just chasing profits, it's clear a subset of them have been doing something more akin to content marketing, using made-up headlines as a form of persuasion. The phenomenon raises uncomfortable legal questions for Facebook, the venue of choice for fake-news purveyors. The social network has proven to be a zone where campaign finance rules are difficult if not nearly impossible to enforce, at least from outside.

Federal campaign finance laws and regulations require political ads and certain other communications to bear disclaimers disclosing who financed them. Those laws also prohibit spending of any kind by foreign nationals in connection with U.S. elections.

There are many qualifications around when a communication violates campaign finance rules, which are enforced by the Federal Election Commission, created by Congress in the 1970s to oversee the Federal Election Campaign Act. Not all political communications by foreign nationals necessarily violate the act, and not all communications dealing with politics, even if paid, require disclaimers per FEC regulations.

Nevertheless, the sites described by The Intercept and Inc. expose the limits of campaign finance laws passed in an earlier era of media, before anyone anticipated the rise of platforms like Facebook. On Facebook, after all, the same message can be a paid ad or not depending on who's viewing it, international borders barely exist, and it's all but impossible to know what other users are seeing in their feeds.

With nearly 2 billion users worldwide, Facebook controls a huge portion of Americans' time and attention. If restrictions on political communications are to have any meaning, they must apply to what happens on Facebook. But it's not at all clear how they do, and regulators have failed to come to a consensus on that issue. In the case of "fake news" and its promotion, enforcement is largely up to Facebook. And so far Facebook has shown no appetite for policing its content to conform with either the letter of the rules or the spirit behind them.

Facebook makes it easy for any user of the platform to turn a post into an ad by "boosting" it with paid promotion. A boosted post will indicate the page it comes from, but the administrator of the page may be anonymous. Unless you're the recipient of a boosted post, there's almost no way to know it's being promoted to other users.

By way of example, this is the text of a Nov. 5 post from Ending the Fed's Facebook page: "Why Donald J. Trump exposes Hillary's felonies in THIS brutal video. She can't run from this anymore! Let's spread it around as much as possible so we can take that evil witch down!"

Facebook would not comment on whether the Ending the Fed purchased ads, and Inc. has no indication that they did. Engagement data from Ending the Fed's Facebook page and another page operated by Ovidiu Drobota, its Romania-based administrator, indicate use of a botnet or "some other 'black hat' marketing tactics involving fake accounts," according to Brandon Mendelson, author of Social Media Is Bullshit.

Boosting stories to a small number of users in hopes of jump-starting viral sharing is a common practice for social-media-savvy publishers like Buzzfeed and Vice. Meanwhile, close to an election, an ad that mentions a candidate by name, even without a specific call to action, can constitute a regulated communication requiring a disclaimer. An entity seeking to persuade voters to boost a pro-Trump or anti-Clinton story would thus make it a paid political communication under the purview of FEC regulations.

Apparently hoping to sidestep such a conclusion, Facebook requested an advisory opinion from the FEC in 2011, asking it to confirm that "small, character-limited ads qualify for the 'small items' and 'impractical' exceptions, and do not require a disclaimer" under FEC guidelines. The six-seat FEC came to a deadlock, and offered no conclusive opinion.

Google sought guidance from the FEC concerning the requirements for disclaimers on certain ads in 2010, and received a response that provided little guidance in relation to whether and how to apply disclaimers to future political ads.

"I think there's some lag with the FEC catching up with the times," says political lawyer Troy McCurry, who served as counsel to the FEC's Republican commissioners at times from 2010 until this year. Not all commissioners are active on social media, he notes.

That is not to say regulations do not apply. "If an ad on any social media platform contains words of express advocacy, those ads would fall under the FEC's regulations, including its disclosure requirements and foreign national expenditure ban," says McCurry.

Regulators' neglect of digital media becomes more quaint with each passing year. In 2017, the internet is set to overtake television as the biggest medium for U.S. ad spending in 2017, with Facebook and Google together claiming two-thirds of all dollars.

Facebook appears less than eager to grasp the baton of self-regulation. Asked if the company requires political ads to bear disclaimers describing their sources or creators, a Facebook spokesman directed Inc. to a section of its ad policies that addresses laws generally. The guidelines do not specifically address FEC requirements for disclaimers on certain political ads, or for prohibition of foreign nationals from purchasing certain types of ads.

"Advertisers are responsible for understanding and complying with all applicable laws and regulations. Failure to comply may result in a variety of consequences, including the cancelation of ads you have placed and termination of your account," the company's ad guidelines read.

There is no legal mandate for Facebook to ensure ads comply with FEC rules, according to McCurry. That means there's no legal pressure for Facebook to search out ads that appear to be in violation of FEC rules and remove them or report or suspend users purchasing them.

It's worth noting that the law probably wouldn't punish Facebook even if a violation were discovered. The offending party in such a situation would likely be the ad purchaser and not Facebook, according to Jon Waclawski, a political lawyer who formerly served as counsel for the Republican National Committee.

However, the FEC would have the authority to subpoena Facebook for identifying information about the purchaser of a political ad if a complaint about the ad were filed.

Lack of clarity doesn't end with the law. The design of Facebook's ad platform makes it challenging for users to report suspicious ads.

If a user were seeking to find out who purchased a political ad on Facebook, or had determined a foreign national had purchased a political ad and wanted the FEC to take action, they could file a complaint with the commission. The FEC would then have to vote on whether to take action, so the complaint wouldn't necessarily result in any action.

But to file a complaint about an ad, the user would have to see it and identify it as an ad worth complaining about. Facebook's promoted posts, which are essentially native advertising, don't look like ads. On top of that, as with other online ads, they are ephemeral, disappearing when you refresh the window, unlike a billboard that sits in the same spot by the highway for ages. Also unlike a billboard, viewers of online ads may be a narrow target audience, rather than anyone driving by; Facebook's sophisticated tools for advertisers offer a slew of ways to segment audiences.

In a long-overdue move, the FEC announced plans in September to update regulations to address online and electronic contributions and expenditures. It is unclear what the ultimate impact of proposed future changes may be.

Which means that for now, at least, the choice remains with companies like Facebook whether to voluntarily comply with the spirit of American election law, or leave it up to users themselves to do so.

Published on: Dec 9, 2016