In defense of digital political ads
IT'S MONDAY, AND THIS IS DIGITAL POLITICS. I'm Mark Scott, and here's a little plug for my day job.
As part of work I'm doing linked to the United Kingdom's efforts around social media transparency and accountability, we'll be holding a webinar with regulators and policymakers on Aug. 6 (at 11am UK time / 6am ET — sorry!) about the country's new data access efforts. You can sign up here.
— Google and Meta's collective pullback on political ad transparency in the European Union harms free speech and the public's engagement with political campaigns.
— What Big Tech's recent earnings season demonstrates about their high-wire geopolitical balance between the United States and everyone else.
— Almost half of the United Kingdom has never used artificial intelligence tools in their daily lives.
Let's get started:
THE END OF DIGITAL POLITICAL ADS
LATE LAST YEAR, GOOGLE PUT OUT A POST that few outside of digital policy circles paid much attention to. In the 2-minute read, the search giant's head of EU government affairs said that, as of October, 2025, the tech giant would not allow advertisers to buy political ads targeted within the 27-country bloc. The reason? An obscure new rule, known as the EU Regulation on Transparency and Targeting of Political Advertising, or TTPA.
The rule "introduces significant new operational challenges and legal uncertainties for political advertisers and platforms," read the announcement. "Google will stop serving political advertising in the EU before the TTPA enters into force in October 2025."
Then, on July 25, Meta followed suit. In an equally short and obscure message, the social media company said it too would be ending its political ad offering inside the EU because of the upcoming TTPA. "We continue to believe online political advertising is a vital part of modern politics," Meta said in its post. "The TTPA introduces significant, additional obligations to our processes and systems that create an untenable level of complexity and legal uncertainty for advertisers and platforms operating in the EU."
And with that, the two largest platforms for political ads within the second largest democratic bloc (behind India) hobbled politicians' ability to talk to would-be supporters. On top of that, Google and Meta made it almost impossible to track what was being spent on political campaigns, by who, and who was the audience for these paid-for messages.
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Here's what paid subscribers read in July:
— We are entering a new era of social media where everyone lives in digital siloes and the cost of spreading falsehoods is next to nothing. More here.
— The EU-US trade dispute will not include digital; Where the EU and US diverge on AI governance; Tech-related risks now top people's concerns across multiple different regions worldwide. More here.
— The rise of 'age verification' across the West is ending the era of online anonymity; All you need to know about the White House's upcoming AI Action Plan; The billions to be spent on digital in the next EU Budget. More here.
— The US-EU trade/tariff agreement was a skirmish in a wider tech-focused war; Contrasting American and Chinese AI strategies; Energy consumption linked to AI, data centers and crypto will double between 2022-26. More here.
It was a one-two punch that both hit people's legitimate free speech rights and hamstrung wider society's obligations to understand how national elections were influenced, by domestic and foreign groups.
First, a quick synopsis of the (flawed) TTPA. Introduced in 2024 with the other alphabet soup of EU digital regulation, the rules were aimed at giving citizens greater awareness about the types of political ads they saw online.
That included 1) ensuring political ads were labeled as such; 2) accessible information, stored in an online repository, about who paid for each digital ad; 3) a ban on foreign entities paying for these paid-for messages in the build-up to national elections; and — most importantly — 4) new restrictions that limited platforms and advertisers in targeting people via data the firms/political groups had already collected on individuals unless they explicitly consented to receiving political ads.
The new limits on how political ads could be targeted was a major stumbling block. It made it next to impossible for Meta and Google to help political groups to target would-be supporters. To do that, the companies and/or politicians would have to explicitly ask people if they were OK about receiving digital political ads — something that even the most ardent political supporter would likely be beige about, at best.
There are legitimate weaknesses in the TTPA that everyone knew about from the beginning.
The definition of "political ads" varied widely between platforms, and EU policymakers' efforts to harmonize that — alongside so-called "issues-based" ads like those around climate change, public health and other societal issues — spread the net too wide. In practice, that meant a large bucket of ads beyond traditional party political messaging would likely be caught within the TTPA. That, in turn, would hit platforms' underlying advertising business models with the potential of 6 percent fines (linked to a company's yearly revenue) for failing to comply.
Faced with that regulatory uncertainty — and at a time when Google and Meta are trying (badly) to pull back from politics — it made sense both firms would give up a part of their business that was marginal to their collective bottom lines. Why take the risk if you could just pull the plug in a way that, in theory, would anger some politicians already falling out of love with Europe's penchant for digital regulation?
And yet, I just don't buy in.
Negotiations were still underway about how the TTPA would be implemented, as of October, so pulling the plug now was an active choice from both Google (in November, 2024) and Meta (in July.) The companies would argue that, at some point, they had to call it a day. And that was their choice. But after companies doubled down on their free speech bonafides, the decision to then limit people's free speech rights via buying political ads felt out of step. The separate decisions would be particularly hard for smaller political movements that could level the playing field with larger rivals via targeted digital political ads.
I also don't believe either company doesn't have the internal resources (both technical and financial) to find a solution. Yes, the definition of what constitutes a "political ad" in the TTPA is bad. But both firms have been tracking various types of ads for years. To suggest that engineers — or even artificial intelligence tooling — could not figure out the line between what was allowed, and what was not, also felt too binary.
When you then look at how much these firms are making (more on that in the section below) on a quarterly basis, this looks more like a political decision than an economic one. Alphabet (Google's parent company), for instance, plans to spend $86 billion this year, primarily on AI-related infrastructure. That's on top of the $28 billion net profit the company made in the second quarter of 2025.
When spending/making that amount of money, the idea that figuring out how to implement (flawed) political ad regulations was too costly doesn't add up.
There is still time, before the October deadline, for the tech companies and the European Commission to find a solution. But that's not really how this should work. It is Meta and Google's right to pull back on services within the bloc — even if sometimes that feels more like point-scoring than actual policymaking.
But without a coherent approach to overseeing political ads in one of the world's largest democratic blocs, these companies are leaving a massive hole in which nefarious actors will likely continue peppering voters with political ads — but in a way that lacks transparency, accountability and oversight. That will harm legitimate political actors who will no longer have a legal way, within the bloc, to amplify their messaging to would-be supporters.
Faced with that trade-off, both companies have made the wrong choice. Google and Meta will still play a central role in domestic European politics, even if they follow through with their respective decisions to pull out of the political ad business in Europe.
By abdicating this responsibility, the firms are not, collectively, living up to their stated objectives (to wider society) of uplifting people's free speech rights in a way that promotes transparency and accountability for all.
Chart of the Week
ROUGHLY 40 PERCENT OF BRITS never use artificial intelligence tools as part of their daily lives, and only 10 percent of those polled by YouGov say they use it at least once or twice a day.
For those who do rely on the emerging technology, they most regularly seek information about "a simple topic." The least used reason is to find out what is going on in the news.
Source: YouGov
BIG TECH EARNINGS, AI AND GEOPOLITICS
AS A LAPSED FINANCE JOURNALIST, I can't help but scan tech companies' earnings reports when they are published each quarter. Policymakers and politicians may not always tell the truth. But numbers don't lie, so these regular updates from Silicon Valley's biggest names offer a way to cut through the noise to understand how these firms are making and spending their money.
The figures are wild. Meta's net income in the second quarter, or the profit that the social media giant made after taxes, was a whopping $13.5 billion, or a 36 percent yearly jump. Microsoft's figure rose 22 percent, to $27.2 billion, over the same period. Amazon — not a company known for making much profit, despite its size — recorded net income for the three months through June 30 or $18.2 billion, or a 34% increase.
These profits are crazy. But that's not where the politics lie in the companies' separate announcements.
Instead, the combination of Google, Amazon, Meta and Microsoft said that, during the 2025-26 fiscal year, they had earmarked roughly $370 billion for spending, primarily to drive big bets on artificial intelligence. That includes massive spending on data centers, AI engineers and other AI-related costs required in what is increasingly turning into a Silicon Valley-led race toward AI dominance.
Let's put that into perspective.
The $370 billion back-of-the-napkin figure doesn't include spending from the second tier of AI (Western) giants, so it's an inherently conservative number. It also doesn't include other digital infrastructure spending, tax cuts and research and design expenditure already announced by the likes of the United States and EU. At best, it's a significant under-count on what has already been allocated by these firms — and that comes despite many of the companies recording significant increases in their net profits (see above.)
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Here's another stat: The $370 billion figure — solely linked to Big Tech capital expenditure — is the equivalent to the expected 2025 gross domestic product of the Czech Republic, or the world's 41st largest GDP. In anyone's mind, that is a lot of money.
Here's where the geopolitics comes in.
These firms are American — and some have lent heavily into the Red, White and Blue to win favor with the current White House administration. But much of what has been earmarked in AI-related spending is destined for outside of the US. That includes significant expansion in companies' global networks of data centers to meet non-US needs. In those conversations, the companies have often played down their American roots, highlighting how they can meet the domestic objectives of national politicians eager to develop indigenous AI tooling to compete on the global stage.
In this bizarro world, two opposite, but complementary, messages are playing out, in real time.
For US policymakers, these firms are signed up to the American "dominance" agenda, as articulated in the White House's recent AI Action Plan. For non-US policymakers, the companies are pushing a "we're here to help" ethos that positions them as apolitical globalist allies that can neutrally support these countries' often contradictory policy aims to those of the US.
Central to those conversations are the megabucks announced in the latest earnings cycle. The expected capital expenditure is the realization of these political discussions, both at home and abroad, at a time when all of Silicon Valley is desperately seeking an edge to keep competitors at bay. That means walking a tight rope between American domestic interests and the business opportunities overseas.
What many in Washington have yet to understand is how these conversations are playing out in national capitals from Brasilia to Berlin. Once American policymakers figure that out, it's an open question if they will view the companies' international outreach as either part of American "dominance" or as a potential direct conflict with the White House's MAGA agenda.
What I'm reading
— UK Research and Innovation, a public research body, announced a $74 million program to attract world-class researchers to the UK. More here.
— An Australian court ruled that X would have to respond to a local regulator's requests on how the social network tackled child sexual abuse material. More here.
— Michael Kratsios, the director of The White House's Office for Science and Technology Policy, spoke at the Center for Strategic & International Studies about the AI Action Plan. More here.
— Donald Trump's administration announced tariffs against Brazil, in part related to how the South American country approached questions around content moderation and the role of platforms in the failed 2022 coup. More here.
— Italy's competition regulator announced an investigation into Meta's potential abuse of its market position by installing an AI agent within its WhatsApp service. More here.
