HUD charges Facebook with enabling housing discrimination

The Department of Housing and Urban Development (HUD) on Thursday charged Facebook with encouraging and enabling housing discrimination through its targeted advertising practices.

HUD is charging Facebook with violating the Fair Housing Act, federal legislation that prohibits discrimination against people seeking to buy or rent a home.  

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"Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben CarsonBenjamin (Ben) Solomon CarsonCarson's affordable housing idea drawing undue flak Overnight Energy: Trump EPA looks to change air pollution permit process | GOP senators propose easing Obama water rule | Green group sues EPA over lead dust rules Green group sues EPA over lead dust rules it says are too lax MORE 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.”

The charge follows a months-long investigation by HUD into whether Facebook illegally allows real estate sellers to restrict their advertisements by characteristics such as race. 

Facebook earlier this month agreed to enact sweeping reforms to its ad-targeting system as part of a settlement with civil rights groups alleging similar complaints. The rights groups, including one dedicated to housing, alleged the tech giant allowed advertisers to discriminate against marginalized groups.

As part of that settlement, Facebook will no longer allow advertisers to target or exclude housing ads by age, gender or zip code, and it also removed hundreds of targeting options for anyone advertising housing, credit or employment opportunities.

The company as part of the settlement also said it will create a new portal to allow users to search for and view housing ads in the U.S. regardless of who the advertisers hoped to target.

Facebook said it was surprised by HUD's decision, and said it had enacted changes to its platform to undercut misuse by advertisers.

"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," a Facebook spokesperson said. "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, [American Civil Liberties Union] 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," the spokesperson added. "We're disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues.” 

According to HUD, Facebook allowed advertises to exclude people from seeing housing advertisements based on interests that "closely align with the Fair Housing Act’s protected classes," including users who Facebook classified as non-American-born, non-Christian, interested in accessibility or who were interested in Hispanic culture, in addition to other groups.

Facebook last August removed thousands of targeting options that advertises could use to exclude audiences based on ethnicity, gender and religion, the company noted.

HUD claims that Facebook allowed advertisers to exclude people based on their neighborhood "by drawing a red line around those neighborhoods on a map." 

Finally, HUD's charge asserts that Facebook's machine learning and artificial intelligence (AI) tools "classify and group users to project each user's likely response to a given ad," potentially creating groupings defined by their protected class. 

Facebook says HUD has not found evidence that its AI systems discriminate against people. 

The debate over Facebook's targeted ad practices was originally sparked when ProPublica reported in 2016 that Facebook was allowing advertisers to exclude certain users based on "ethnic affinity," which critics have argued is used as a proxy for race and ethnicity.

Since then, housing, employment and civil rights groups have raised concerns that Facebook was side-stepping civil rights laws by allowing advertisers to target or exclude certain groups closely aligned with protected classes of people. 

"Even as we confront new technologies, the fair housing laws enacted over half a century ago remain clear—discrimination in housing-related advertising is against the law," HUD General Counsel Paul Compton said. "Just because a process to deliver advertising is opaque and complex doesn’t mean that it’s [sic] exempts Facebook and others from our scrutiny and the law of the land."