Facebook Parent Meta Agrees to End Alleged Discriminatory Practices in Housing Ads

In a filing in federal district court in New York, the Justice Department and federal housing officials said they would settle housing discrimination charges against Meta, with no admission of liability by the company, in exchange for Meta’s agreement to make changes to its advertising distribution systems.

“When a company develops and deploys technology that deprives users of housing opportunities based in whole or in part on protected characteristics, it has violated the Fair Housing Act,” said a statement from U.S. Attorney

Damian Williams

for the Southern District of New York. It is illegal to deny someone housing or employment based on federally-protected characteristics such as race, religion and sex.

The Justice Department said the settlement marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system.

“Because of this ground-breaking lawsuit, Meta will—for the first time— change its ad delivery system to address algorithmic discrimination. But if Meta fails to demonstrate that it has sufficiently changed its delivery system to guard against algorithmic bias, this office will proceed with the litigation,” Mr. Williams said.

In a statement, Meta said that it also plans to change its ads related to employment and credit in addition to housing.

“Discrimination in housing, employment and credit is a deep-rooted problem with a long history in the U.S., and we are committed to broadening opportunities for marginalized communities in these spaces and others,” Meta said.

According to federal officials, Meta created an ad-targeting algorithm that would consider protected characteristics—including race, religion and sex—to find Facebook users who mirrored the advertiser’s targeted audience.

In addition, officials alleged, Meta’s ad delivery system has used algorithms that rely on protected characteristics to help determine which subset of an advertiser’s targeted audience will actually receive the ad, and which won’t.

The ad targeting tool, originally known as “Lookalike Audience,” and later as “Special Ad Audience” used a machine-learning algorithm to find Facebook users who share similarities with groups of individuals selected by an advertiser using several options provided by Facebook, according to the Justice Department.

Under the agreement, Meta must stop using the tool by Dec. 31 and has until that month to develop a new system for housing ads to address disparities for race, ethnicity and sex between advertisers’ targeted audiences and the group of Facebook users to whom Facebook’s personalization algorithms actually deliver the ads, the Justice Department said.

Meta also agreed to pay a civil penalty of $115,054, the maximum available under the Fair Housing Act, federal officials said.

An antidiscrimination advocate praised the government’s effort, but said more work remains to ensure fairness in the online world, where antidiscrimination rules haven’t always kept pace with technological change.

Peter Romer-Friedman, a lawyer with Gupta Wessler PLLC, called the settlement a “ground-breaking achievement” but said it doesn’t address potential discrimination in advertising contexts outside the areas of housing, employment and credit.

In a statement, Meta said that its new method “strives to make additional progress toward a more equitable distribution of ads through our ad delivery process.”

Meta added that it will build into its ad system a new feature “designed to make sure the audience that ends up seeing a housing ad more closely reflects the eligible targeted audience for that ad.”

Write to John D. McKinnon at [email protected]

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