Facebook-funded American Edge waged a war against regulation

The argument echoed warnings in op-ed pages throughout the country, from Orange County, Calif., to Nashua, N.H., and a national ad campaign starring Stanley himself, in which he contends Washington’s “misguided” agenda is a danger to America’s small businesses.

The ads, however, were funded not by local businesses, but by American Edge, a political advocacy group founded by a single corporation: Facebook.

Backed by millions from Facebook-parent company Meta, American Edge has launched a full-throated campaign to combat antitrust legislation in Washington, placing op-eds in regional papers throughout the country, commissioning studies, and collaborating with a surprising array of partners, including minority business associations, conservative think tanks, and former national security officials. It’s a political playbook more common to other industries, including pharmaceuticals, tobacco and telecommunications. But tech companies, under heightened scrutiny from federal regulators, are seizing on these methods. (Meta also paid a GOP consulting firm to malign TikTok, The Post reported in March.)

Facebook paid GOP firm to malign TikTok

As Facebook’s antitrust risks in Washington have grown, the group’s influence has expanded to new domains and a diverse mix of partners, a new investigation using copies of records obtained by the tech watchdog group Tech Transparency Project and viewed exclusively by The Washington Post illustrates. Tech Transparency Project receives funding from the George Soros-founded Open Society Foundations, Craig Newmark Philanthropies, Bohemian Foundation and Omidyar Network.

In advertisements and op-eds, American Edge plays on fears about the tech prowess of China, a talking point of Facebook CEO Mark Zuckerberg. The group also argues, in ominous tones, that new antitrust laws will weaken the American tech sector, hurting the tools used by minority-owned small businesses and dismantling companies that could provide a line of defense against cyberattacks from an increasingly aggressive Russia.

National TV spots, starring local entrepreneurs from Arizona and Mississippi, portray such issues as vital to America’s heartland. The group’s messages pop up in the local TV news in Utah, defense-focused trade publications, conservative websites and on social media — absent Facebook’s name, an omission that serves a broader purpose.

“Facebook can’t be the messenger,” said a person familiar with the organization who spoke on the condition of anonymity to describe deliberations around its formation. “If we are out there saying it, people won’t believe it as much, so the conversation is how can you set up a proxy.”

After a spate of political scandals that left Meta’s reputation battered, American Edge has emerged as a key envoy, enabling the company to build the appearance of widespread grass-roots opposition without leaving its own tarnished fingerprints. Facebook is also facing a sprawling antitrust investigation from the U.S. Federal Trade Commission.

American Edge ads bash policymakers seeking to regulate the Internet as having a “misguided agenda,” or wanting to “take away the technology we use every day.” That tone stands in contrast to public relations campaigns that run under Meta’s name, which position the company as an eager partner aiming to update outdated Internet regulations and features Facebook employees calling for “better guidance” from policymakers on thorny issues like content moderation. Meta has publicly criticized antitrust laws, saying they should “not punish successful American companies.”

Some of the campaigns disclose American Edge’s backing, but none mention its relationship to Facebook. (The company is listed as an affiliate on American Edge’s website.)

How Facebook’s ‘metaverse’ became a political strategy in Washington

“As The Washington Post previously reported, we’ve been clear about our support for the American Edge Project’s efforts to educate the public about the benefits of American technology,” said Facebook spokesman Andy Stone. “But the proposed antitrust reforms would do nothing to address the areas of greatest concern to people and could weaken America’s competitiveness.”

American Edge CEO Doug Kelly declined requests for an interview. In emailed responses to The Washington Post, he said that since the group began with “a seed grant” from Meta, it has secured additional funders and expected to add more as it grows.

“This growth is the result of a keen awareness that protecting America’s technological edge is a worthy and meaningful endeavor,” he wrote.

Kelly said American Edge has not paid Stanley to appear in its ads. Kelly also defended the group’s omission of its relationship to Meta in ads and op-eds.

“The Washington Post may not display Amazon’s name on its front page, but the American Edge Project has displayed Facebook’s name prominently on ours since launch,” he wrote. (The Washington Post discloses in articles about Amazon that it is owned by company founder Jeff Bezos.)

The Post first reported the existence of American Edge in 2020, when a consultant advising the group described Facebook as one of “a diverse set of stakeholders” in the organization. But tax records show the organization was founded entirely by Facebook, with a single donation of $4 million between December 2019 and October 2020.

Though tech companies are some of the largest lobbying spenders in Washington, they aren’t required to disclose investments in advocacy groups like American Edge.

Former national security officials last month wrote a letter to several congressional committees, calling for them to launch a review of competition bills “that could hinder America’s key technology companies in the fight against cyber and national security risks.” The letter was signed by seven former national security officials, including Frances F. Townsend and Michael Morell, who both sit on American Edge’s national security advisory board and appear in the group’s new ad campaign. The letter did not mention their ties to American Edge. Morell said through a spokesman that the affiliation had been disclosed in a prior news release.

Another ad campaign, which began in April and also features national security officials, has adapted its message to the Ukraine war with warnings that both Russia and China may gain a technological edge as an “unintended consequences” of regulation.

American Edge’s ads have been particularly aggressive on Capitol Hill, where multiple Hill staffers working on competition legislation and their significant others have been bombarded with targeted ads, including some on Meta’s own platforms, Facebook and Instagram, according to multiple congressional aides, who spoke on the condition of anonymity to speak candidly about the organization’s tactics.

Even the lawmakers who craft the bills can’t avoid them.

“I see them on television, I see them online all the time,” said David N. Cicilline (D-R.I.), the chair of the House antitrust committee who has led the efforts to pass antitrust legislation targeting Silicon Valley. “They’re making our point that these platforms have too much power. They have unlimited resources.”

Kelly says that American Edge runs its ads in all 50 states.

Tech companies spent almost $70 million lobbying Washington in 2021

While many companies fund outside political groups to push industry-friendly messages, Facebook’s reliance on proxies has grown more extensive recently because of its unique reputational crisis, said three people familiar with internal conversations, who spoke on the condition of anonymity to describe them.

The company faced blistering criticism over the spread of Russian disinformation on its platforms during the 2016 elections, and its political fortunes worsened in 2018, when news reports revealed that the company had inappropriately allowed a Trump-allied political consultancy, Cambridge Analytica, to siphon the personal data of millions of Facebook users.

Facebook began to put together a plan for American Edge ahead of the 2020 presidential election season, anticipating that Big Tech would be a target on the campaign trail, two of the people said. They decided to seed a think tank, identifying a network of partner organizations that could emphasize how the public, and particularly vulnerable minorities, might be hurt by antitrust laws.

By showing Facebook’s value in society, the company could play offense against attacks on Big Tech, according to the people.

Through American Edge, Meta’s Washington office also hoped to align itself with growing skepticism of China in the Trump White House, one of the people said.

Executives advocated for pitching Facebook as an “American company,” and aggressively attacking rival TikTok for its ownership by China.

By showcasing Facebook’s alliances with small businesses, the company also hoped to impugn another rival, Apple, which was undermining Facebook’s business with upcoming changes to its operating system.

American Edge has bolstered ties with minority business interest groups even as civil rights advocates are among those leading calls for greater regulation of Silicon Valley. American Edge gave a grant to the National Black U.S. Chamber of Commerce in 2020, tax records show, and the organization’s leader wrote an op-ed in the Las Vegas Sun during Black History Month in 2021 headlined “Tech platforms are vital for nation to support Black-owned businesses amid pandemic.” He argued the products tech giants make allowed business owners to operate virtually and advertise their products. The National Black U.S. Chamber of Commerce did not immediately respond to a request for comment.

Some of the organizations that American Edge has given grants to have gone on to write op-eds that criticize tech regulation in regional newspapers without disclosing those financial ties in the articles. Kelly said that the company provides grants to fund projects like a study from the conservative think tank the Lexington Institute, titled “Why U.S. National Security Requires A Robust, Innovative Technology Sector.” Loren B. Thompson, the report’s author, said in an interview that American Edge had “modest involvement” in putting together the report, including deciding the general content of the study and changing some phrasing in it before it was published.

But the strategy also caused some concern among a handful of executives, who felt it could be viewed as hypocritical because the fear-based messages against regulation could appear to undermine the company’s sunny public campaign embracing regulations for the tech industry, two of the people said.

Facebook’s history of using surrogates dates at least to 2011, when the company hired a PR firm to push stories critical of rival Google’s privacy practices. In 2018, the company faced widespread criticism after news articles exposed it was paying a crisis public relations firm, Definers Public Affairs, to place articles attacking billionaire George Soros, who had funded groups that were critical of Facebook. Facebook said in a 2018 blog post that it hired Definers to “diversify our DC advisers” after the 2016 election, in the face of regulatory threats.

American Edge has spent more than $70,000 on advertising on Google ads, and nearly $2 million in ads on Facebook, according to the companies’ ad databases.

Grants to nonprofits and advocacy groups were just a fraction of American Edge’s spending in 2020, according to the tax records. The majority has gone toward advertising. Though records were not yet available for the organization’s spending in 2021, it appears its spending on advertising has only grown in 2021 and early 2022. It has regularly sponsored popular Washington email newsletters, bought targeted ads on Facebook and snapped up TV spots.

Tech Transparency Project, which provided the tax records to The Post, is a research initiative within Campaign for Accountability, a nonprofit which has worked on corporate influence, the Jan. 6 insurrection and abortion access. Campaign for Accountability does not disclose its financial backers.

“As a nonprofit that solicits donations from the public, we don’t release a comprehensive list of our donors,” said Michelle Kuppersmith, executive director of Campaign for Accountability, who oversees the Tech Transparency Project. “It would be incredibly rare to find a public-facing nonprofit that does so.” Kuppersmith added that they go beyond disclosure requirements for the Tech Transparency Project “because we are acutely aware that tech companies with resort to bad faith ad hominem attacks.”

Through the firm Ipsos, American Edge funded polling that concluded policymakers pursuing changes to antitrust law targeting the tech industry are “out of touch” with their constituents, finding Americans had significant national security concerns about breaking up the tech companies.

In recent years, Facebook and other large tech companies are among the leading lobbying spenders in Washington, with the company funneling more than $20 million to efforts to influence efforts to regulate the tech industry in 2021.

American Edge’s work has largely played out in public through advertising and media, but reflects talking points that tech industry lobbyists have been pushing behind the scenes as well, especially during recent Senate markups of competition bills.

But the publicly disclosed spending is only a slice of the funds that companies allocate toward influencing Washington in less overt ways.

“With tremendous economic power also comes tremendous political power,” Cicilline said. “It’s a desperate effort to hold on to an ecosystem to give them monopoly power.”