Facebook’s Fair Housing Lawsuit is Just the Tip of the Iceberg

November 18, 2016 | by:

Facebook recently found itself at the center of a Fair Housing Act controversy after a group of users filed a class-action lawsuit claiming the social network’s ad technology is used to racially discriminate against housing applicants. Although Facebook was quick to announce it would work on ways to prohibit racial discrimination in housing and employment ads, it’s proposed solution still has holes. mountainsphoto

The controversy can be traced back to a ProPublica article published October 28, 2016. In the article, the public interest journalism group revealed how it was able to purchase a Facebook ad that targeted all apartment seekers except for African Americans, Asian Americans, and Hispanics. The exclusion was possible due to “affinity grouping,” a marketing practice that allows ad-buyers to segment audiences based on demographic data.

Shortly after the article was published, a group of Facebook users filed a class-action lawsuit against the social network, claiming that its ads were blatantly violating the federal Fair Housing Act. If a judge accepts the suit, the class will include all US Facebook users who have not seen an employment or housing-based ad in the past two years because the ad’s buyer used the platforms’ ‘Exclude People’ functionality to exclude the class member based on race.      

To its credit, Facebook was quick to announce it would work on ways to fix racial discrimination in housing ads.

On November 11, VP of US Public Policy and Chief Privacy Officer Erin Egan published a post on the company’s Newsroom blog stating that discriminatory advertising has no place on Facebook. The post also stated that Facebook “will disable the use of ethnic affinity marketing for ads that we identify as offering housing, employment, or credit.”

While Facebook’s stance on ethnic affinity marketing takes a sympathetic tone, we can’t help but notice how the company’s language dances around other Fair Housing Act issues.

Racial discrimination is not the only form of discrimination prohibited by the FHA. The act also prohibits discrimination based on familial status, age, etc. Yet Facebook’s Newsroom announcement remained decidedly mum on these other affinity groups, even though its technology allows you to exclude audiences based on these factors as well.

As mentioned above, Facebook is actively working on ways to disable the use of ethnic affinity marketing for ads that offer housing. But the fact that Facebook’s announcement selectively identified ethnic affinity marketing poses a real problem. Namely, it suggests that the social network is not working on ways to disable affinity marketing for other FHA-protected groups.

Disabling ads that exclude an ethnic affinity is a great start. But that failsafe still leaves a lot of room for error if your marketing teams are unfamiliar with FHA advertising rules.

Imagine that you’ve outsourced your Facebook advertising to an agency that has a portfolio spanning a variety of industries. Such an agency would likely use affinity grouping to refine audiences, as doing so is a good way to increase campaign effectiveness. However, the agency may not be aware that popular (and legal) affinity group exclusions for other industries are federally prohibited in the housing industry.

Until Facebook announces that it will also disable the exclusion feature for other FHA-protected affinity groups, there’s really only one way to play it safe: Make sure the people who run your Facebook campaigns have a definitive understanding of Fair Housing Act regulations.