HUD accuses Facebook of bias

UNDER SCRUTINY: Facebook said it was surprised by HUD's decision. "We’ve been working with them to address their concerns and have taken significant steps to prevent ads discrimination,” Facebook said in the statement. Andrew Harrer/Bloomberg

U.S. regulators say digital advertising practices at Facebook Inc. violate housing law and they are reviewing whether ads placed by Twitter Inc. and Alphabet Inc.'s Google also discriminate against those seeking a place to live.

The Department of Housing and Urban Development on Thursday accused Facebook of enabling and encouraging bias based on race and religion, as well as sex, by restricting who can see housing-related ads on its platforms and across the internet. HUD also has sent letters to Twitter and Google inquiring about the advertising systems for their sites and products as well, said Brian Sullivan, a department spokesman.

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

The social network allowed those advertising housing to exclude people it classified as parents; non-American-born; non-Christian; interested in accessibility and Hispanic culture; as well as other group's deemed protected classes, HUD said in a statement.

The Washington Post reported earlier Thursday that HUD had alerted Google and Twitter last year that it was scrutinizing their practices for possible violations of the federal Fair Housing Act.

"We've had policies in place for many years that prohibit targeting ads on the basis of sensitive categories like race, ethnicity, religious beliefs, disability status, negative financial standing, etc," a Google spokesman said in an email. "Our policies are designed to protect users and ensure that advertisers are using our platforms in a responsible manner. "

A Twitter spokesman said the company doesn't allow discriminatory advertising on its platform and that, "someone using Twitter to advertise agrees to comply with the law and not use our services for illegal activities."

The government's lawsuit against Facebook came after the social network has been working to address many of the issues raised and last year eliminated advertising targeting options that could be misused.

Last week, the Menlo Park, California-based company reached agreements with the National Fair Housing Alliance, the American Civil Liberties Union and others to change how housing and credit ads can be run on the platform. Facebook said it would no longer let advertisements for housing, jobs or credit be targeted to particular users by age, gender or zip codes and companies that use the social network and its other platforms to run those ads will have to certify compliance with anti-discrimination laws.

"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," Facebook said in the statement. "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."

HUD's accusation will be heard by a U.S. administrative law judge unless one of the parties to the lawsuit wants it moved to federal district court, according to the agency. If the judge rules that Facebook violated the Fair Housing Act, penalties could include fines and a ban on the ads in question.

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