HUD charges Facebook with housing discrimination over company's targeted advertising practices

Facebook was charged with violating the Fair Housing Act by the U.S. Department of Housing and Urban Development (HUD) because the company's targeted advertising discriminates on the basis of race and color.

The Thursday announcement, which alleges that Facebook unlawfully discriminates on the basis of race, color, national origin, religion, familial status, sex and disability by restricting who can view housing-related ads on its platform, follows HUD's probe of a complaint from August 2018.

According to HUD's charge, the Mark Zuckerberg-led social network allowed advertisers to exclude people whom Facebook characterized as parents; non-American born; non-Christian; interested in accessibility; interested in Hispanic culture; and other traits that align with the Fair Housing Act's protected classes. The tech platform also allegedly gave advertisers the option of showing ads only to men or only to women.

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HUD also claims that Facebook combines data it collects about user attributes and behavior with data it obtains about user behavior on other sites and offline, and then uses machine learning to predict what a user's likely response to an ad will be -- and in doing so, the company may recreate groups defined by their protected class.

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

A source with knowledge of the company's thinking pushed back on HUD's claim about the tech giant's artificial intelligence systems, saying there has not been proof shown that these systems discriminate against users after ads are placed.

Last week, Facebook announced that it reached a major agreement with the National Fair Housing Alliance, the ACLU and others to change its advertising policies around targeting certain groups, including the removal of age, gender and zip code targeting from all housing, credit and employment ads on the platform. Prior to that, the company had already removed other targeting options that limited advertisers' ability to target users based on ethnicity, gender and religion.

The company provided Fox News with the following statement on Thursday:

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“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. 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. 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.”

Galen Sherwin, senior staff attorney with the ACLU's Women's Rights Project, praised the HUD charges in a statement to Fox News.

“We welcome the news that HUD is continuing to pressure Facebook to reform its ad targeting platform, and in particular, the use of tools and algorithms that skew the audiences who receive ads. 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. We will continue to monitor the settlement’s implementation, which requires Facebook to study and report on algorithmic bias and any ongoing discriminatory impact of its targeting features."

Facebook, which uses AI and machine learning in a range of ways on its family of apps, has invested in several internal and external initiatives to develop best practices around the ethics of AI, including a $7.5 million five-year grant in partnership with the Technical University of Munich.

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Freedom from Facebook, a coalition of groups that have called for the tech giant to be broken up, also praised HUD's actions but said there's more work to be done.

“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," Sarah Miller, co-chair of Freedom from Facebook, said in a statement.

HUD's charge will likely be heard by an administrative law judge, who may decide to award damages for harm caused by the discrimination or order injunctive relief or force Facebook to pay fines. If the matter goes to federal court, the judge may also award punitive damages.