The company called it a “historic” decision.
SAN FRANCISCO — The U.S. Department of Housing and Urban Development charged Facebook Thursday with discrimination for allowing advertisers to restrict who can view housing ads.
The civil charges under the Fair Housing Act accuse Facebook of unlawfully discriminating based on race, national origin, religion and more. They come one week after the social media giant agreed to a sweeping settlement with civil rights, fair housing and labor groups over the same issue.
“Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben Carson said in a statement Thursday morning. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”
Facebook spokeswoman Elisabeth Diana said talks with HUD broke down when the agency insisted on viewing sensitive information such as user data “without adequate safeguards.”
“We’re surprised by HUD’s decision, as we’ve been working with them to address their concerns and have taken significant steps to prevent ads discrimination,” Diana said in a statement. “We’re disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues.”
USA TODAY asked Facebook’s Chief Operating Officer Sheryl Sandberg about the HUD negotiations last week. She said Facebook was working to address HUD’s concerns.
The American Civil Liberties Union, which was part of last week’s settlement, said it welcomed the HUD charges to turn up the pressure on Facebook to make additional changes to its ad targeting tools.
“Although the settlement we reached with Facebook will result in removing many of the most troubling of Facebook’s advertising practices, there is more work to be done,” Galen Sherwin, senior staff attorney with the ACLU’s Women’s Rights Project, said in a statement.
As part of a settlement with civil rights, fair housing and labor groups, Facebook agreed to remove age, gender and ZIP code targeting from housing, employment and credit ads and paid out just under $5 million. Facebook also said it would build a tool that allows people to search for all housing ads in the U.S.
The steps were the latest to contain a ballooning controversy over ad targeting that began in 2016 when news outlet ProPublica revealed it could buy housing ads to target Facebook users that excluded racial and ethnic groups.
At its scale with more than 2 billion users, Facebook relies heavily on automated software to sell ads. If ads for housing opportunities are tailored to specific protected audiences, the people posting those ads are in violation of the 1964 Civil Rights Act, housing experts say.
“There is a provision of the Fair Housing Act that makes it illegal to discriminate in housing ads. By allowing advertisers to exclude certain categories of people from seeing ads, HUD is arguing that Facebook is violating that provision,” said Rigel Oliveri, a law professor at the University of Missouri and an expert in fair housing law. “More and more the way that people get their information when they are doing a housing search is by going online. People don’t look up classified ads anymore. It’s absolutely important that this space be addressed, especially with a provider like Facebook, which is so huge and that so many people use.”
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Reforming Facebook’s ad targeting tools is critical for the low-income displaced tenants who may have been victims of housing discrimination that her nonprofit serves, said Erin Kemple, executive director of the Connecticut Fair Housing Center. These days her clients use Facebook, not Craigslist and other online services, to find housing, she said.
“They don’t realize what units they are seeing may be different depending on their race, ethnicity or national origin,” Kemple said. “We are extremely happy HUD has made this charge. We are hopeful that the HUD charge and the settlement will make significant differences in how Facebook does its work in the future.”
The HUD investigation began under the Obama administration. The charges could be a warning shot to other technology companies that employ similar ad targeting tools. HUD declined to comment.
Facebook and other technology companies have deflected responsibility for discriminatory ads by claiming protection from liability under the Communications Decency Act of 1996, said Olivier Sylvain, a law professor at Fordham University School of Law in New York.
“The logic on which they rely is that they are the mere conduits for communication between users,” Sylvain said. “But, when they go to these lengths — when they sort users and then develop processes that help advertisers target and deliver ads — they are going well beyond being mere conduits.”
Facebook’s practices violate the Fair Housing Act of 1968 by allowing advertisers to exclude Facebook users who are parents, not born in the U.S., and those interested in a wide variety of topics including, for example, accessibility or Hispanic culture, HUD alleged. These interests “closely align” with the housing act’s protected classes, HUD said.
Facebook also allowed advertisers to exclude those who see their ads based on neighborhoods, as well as to show ads to only men or only women, the agency said.
HUD and the Justice Department filed an administrative complaint in August 2018, in the U.S. District Court for the Southern District of New York.
An administrative law judge will hear regulators’ charges, unless Facebook wants the case heard in federal court. The administrative law judge could award damages if after the hearing it’s determined discrimination did occur.
“The HUD complaint is certain to add much needed pressure on Facebook to eradicate discrimination from its ad platform altogether, and we encourage the department to investigate the wide swath of online ad targeting platforms,” the ACLU’s Sherwin said.
Facebook and President Donald Trump have not been on friendly terms recently. Last week, the president tweeted, “Facebook, Google and Twitter, not to mention the Corrupt Media, are soo on the side of the Radical Left Democrats.”
Also last week, Facebook had to apologize to the White House’s social media director for blocking his Facebook page.
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