Facebook reaches settlement with feds to end biased housing ads

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Facebook housing ads settlement overview:

• Who: The federal government has reached a settlement with Facebook parent company Meta over the platform’s advertising tools.
• Why: The settlement means Meta must stop using a tool that allows its advertisers to exclude certain users from seeing housing ads based on their race and other discriminatory variants.
• Where: The settlement was filed in New York federal court.

The federal government has reached a deal with Facebook’s parent company that will see the platform stop allowing advertisers to exclude certain Facebook users from viewing housing ads based on their race, color, religion, sex, disability, familial status and national origin.

The settlement was filed June 21 in a New York federal court, the same day the U.S. Department of Justice filed its complaint against Meta Platforms.

The complaint alleged Facebook’s “special ad audience” tool violates the Fair Housing Act by allowing people advertising housing to specify that certain identities could not see the ads.

As a result of the settlement, Meta has agreed to allow the tool to expire at the end of the year, according to the settlement. It will also pay a penalty of more than $115,000.

Facebook settlement prompts Meta to make new tool

The Facebook settlement has prompted Meta to create a new tool for housing ads. 

The new tool, referred to as a “variance reduction system,” will specifically tackle algorithmic discrimination, U.S. Attorney Damian Williams says in a press release. 

“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,” he says. 

Assistant Attorney General Kristen Clarke added that the settlement was “historic,” saying it marked the first time Meta had agreed to terminate one of its algorithmic targeting tools and modify its delivery algorithms for housing ads in response to a civil rights lawsuit.

Meta said in a post on its website the settlement reflects more than a year of collaboration with the U.S. Department of Housing and Urban Development (HUD).

“We’re making this change in part to address feedback we’ve heard from civil rights groups, policymakers and regulators about how our ad system delivers certain categories of personalized ads, especially when it comes to fairness,” the site says. “So while HUD raised concerns about personalized housing ads specifically, we also plan to use this method for ads related to employment and credit.”

In August, a class action lawsuit alleging Facebook discriminates against users based on their race with the housing advertisements it allows them to see was tossed by a California federal judge.

What do you think of the Facebook settlement agreement? Let us know in the comments! 

The DOJ is represented by Assistant U.S. Attorney Ellen Blain.

The Facebook housing ads class action settlement is U.S. v. Meta Platorms Inc. f/k/a Facebook Inc., Case No. 1:22-cv-05187, in the U.S. District Court for the Southern District of New York.

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