U.S. Government Charges Facebook With Discrimination Based on Ad Targeting Practices

HUD filing claims ad buys excluded minority groups

The charge follows a formal complaint based on reporting by ProPublica. Getty Images

The U.S. Department of Housing and Urban Development officially charged Facebook with discrimination today in a document filed with its own Office of Administrative Law Judges in Washington, D.C.

The filing, embedded in full at the end of this story, claims that the social media platform’s ad sales practices violated the Fair Housing Act of 1968 by excluding users from targeted ad buys based on their membership in protected classes based on gender, ethnicity, religion, nation of origin, geographic location, familial status and/or physical disability.

"Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face."
Ben Carson, U.S. Secretary of Housing and Urban Development

This charge concerns ads promoting real estate and follows a formal complaint issued on Aug. 13, 2018 that alleged Facebook had committed housing discrimination by “enabling advertisers to restrict which Facebook users receive housing-related ads” based on the same factors.

“Facebook is discriminating against people based upon who they are and where they live,” read a statement from HUD Secretary Ben Carson. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

HUD General Counsel Paul Compton added, “Just because a process to deliver advertising is opaque and complex doesn’t mean that it’s exempts Facebook and others from our scrutiny and the law of the land.”

One key point in the filing claims that Facebook sometimes prevents ads from reaching certain minority audiences even if the advertisers in question do not wish to exclude them. “This is so because [Facebook] structured its ad delivery system such that it generally will not deliver an ad to users whom the system determines are unlikely to engage with the ad, even if the advertiser explicitly wants to reach those users regardless,” it reads.

Nonprofit newsroom ProPublica first brought the issue to public attention in 2016 with a story in which Facebook’s targeting service allowed its reporters to buy an ad for housing that excluded all users “with an ‘affinity’ for African-American, Asian-American or Hispanic people.”

The complaint, which draws heavily from Facebook’s own “Guide to Digital Advertising” and related documents, alleges that the platform “inevitably” groups consumers together based on protected class attributes by combining data to create “Lookalike Audiences.”

“By grouping users who ‘like’ similar pages (unrelated to housing) and presuming a shared interest or disinterest in housing-related advertisements, [Facebook’s] mechanisms function just like an advertiser who intentionally targets or excludes users based on their protected class,” the complaint reads.

HUD seeks the maximum civil penalty. Under 2016 revisions accounting for inflation, monetary penalties for violations of the Fair Housing Act can amount to $19,787 on the first offense and $98,935 for parties found to have violated the act more than two times over the previous seven years.

In an email, a Facebook spokesperson said the company was “surprised” by the lawsuit and noted that it has already taken “significant steps” to prevent discriminatory advertising on the platform.

“Last year we eliminated thousands of targeting options that could potentially be misused, and just last week we reached historic agreements with the National Fair Housing Alliance, ACLU, and others that change the way housing, credit, and employment ads can be run on Facebook,” the spokesperson said. “While we were eager to find a solution, HUD insisted on access to sensitive information—like user data—without adequate safeguards. We’re disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues.”

Facebook also claimed HUD had no direct evidence that its AI tools discriminated against individuals and questioned whether other large digital platforms still allow advertisers to target based on the aforementioned factors.

While the spokesperson stated that Facebook did not expect this morning’s filing, the company published a post last week titled “Doing More to Protect Against Discrimination in Housing, Employment and Credit Advertising” in which chief operating officer Sheryl Sandberg detailed recent “settlements with the NFHA, ACLU, CWA and other groups” that forbade parties advertising products related to housing, credit and employment from using the tools at the center of the HUD filing. It also confirmed the removal of the “multicultural affinity targeting” option that played a large role in ProPublica’s reporting.

Similarly, a post published days after the 2018 complaint claimed that Facebook had eliminated the ability for advertisers to exclude audiences from ad buys based on ethnicity and religion. “We’re committed to protecting people from discriminatory advertising on our platforms,” it read. “That’s why we’re removing over 5,000 targeting options to help prevent misuse.”

HUD’s trial attorney handling the case did not immediately respond to emails and phone calls seeking further comment beyond forwarding Adweek a statement.

The full filing is embedded below.

@PatrickCoffee patrick.coffee@adweek.com Patrick Coffee is a senior editor for Adweek.
@kelseymsutton kelsey.sutton@adweek.com Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.