Facebook Friction

For sales and marketing teams, serving advertisements through Facebook may seem like common sense to reach a broader client base. 

But recent charges leveled by the U.S. Department of Housing and Urban Development (HUD) against Facebook for violating the Fair Housing Act complicate that notion. 

In a lawsuit filed in March, HUD alleges Facebook’s ad platform offered its advertising clients less control over their desired audiences than they may have thought or paid for.

According to HUD’s filing, Facebook “[encourages, enables, and causes] housing discrimination through the company’s advertising platform of race, color, religion, sex, familial status, national origin and disability.” 

Facebook scrapes user data from its own platforms, outside websites, and from non-digital sources, then channels it into its algorithm to determine optimal users, or those it determines to be most likely to engage with the ads. Other platforms including Amazon, Twitter, and Google also allow ZIP code targeting in their advertising services. 

While Facebook’s practices allow advertisers to target or exclude users (and thus discriminate based on FHA-protected characteristics, such as race or disability), HUD alleges that Facebook also independently engaged in housing discrimination by determining which users on its platforms will see which ads, rather than allowing advertisers that choice, and then charged advertisers different pricing for serving those ads based on Facebook’s inferences.

In a statement, HUD general counsel Paul Compton said, “Just because a process to deliver advertising is opaque and complex doesn’t mean that it exempts Facebook and others from our scrutiny and the law of the land.”

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