Facebook Hit With New HUD Lawsuit Over Housing Ads

The Department of Housing and Urban Development (HUD) has filed charges against Facebook, Inc. alleging that the social media giant has violated multiple subsections of the Fair Housing Act, indicating that Facebook has engaged in discriminatory advertising practices that could limit certain protected classes from gaining access to housing.

This lawsuit comes just one week following an announcement by Facebook that it will implement sweeping changes to its advertising platform by the end of the year, in response to previous lawsuits relating to the Fair Housing Act.

“[…] The Director of the Office of Systemic Investigations in the Office of Fair Housing and Equal Opportunity has determined that reasonable cause exists to believe that a discriminatory housing practice has occurred and has authorized and directed the issuance of this Charge,” the charging document reads.

Among some of the specifics laid out in the charges, HUD alleges that Facebook, “continues to use protected characteristics to decide which users see housing-related ads,” and that they also continue to, “exclude users who share protected characteristics from seeing housing-related ads,” according to an emailed HUD press release.

“For years, Facebook has offered housing-related advertisers discriminatory options that they could use to exclude users from seeing ads based on their protected class and has not appropriately addressed the harm caused,” HUD said in the emailed release. “Further, Facebook continues to operate an ad delivery system that excludes users of protected class groups from seeing housing-related ads.”

The charge document specifies the protected classes under the Fair Housing Act as, “race, color, religion, sex, familial status, national origin [and] disability [status].”

Facebook’s reaction

“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,” said Joe Osborne, a Facebook spokesman in a statement to the Washington Post.

Last week, Facebook outlined significant steps they were taking to reform the company’s advertising platform and remove the ability of ad-buyers to target or exclude people based on classes protected under the Fair Housing Act. Reverse mortgage professionals responded to Facebook’s changes with dismay and uncertainty.

The social media company continued that in its efforts to resolve issues with the agency, HUD asked for access to information the company deemed too sensitive.

“While we were eager to find a solution, HUD insisted on access to sensitive information — like user data — without adequate safeguards,” Osborne continued. “We’re disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues.”

Facebook’s methods of advertising do have problems, Florida board-certified real estate attorney Gary M. Singer told RMD last week, particularly in terms of the way that it has targeted leads. “Whether or not that amounts to discrimination or not, we’ll leave that to the attorneys and the judges that are working on the case,” he said. HUD has apparently made the decision that it does count as discrimination.

Prior warning

These charges also follow-up complaints that HUD issued concerning Facebook’s ad-targeting practices last year, when the agency issued a warning to the social media company about its advertising practices.

“I think it’s a shot across the bow by HUD,” Jim Milano, a partner at the Washington, D.C. law firm of Weiner Brodsky Kider PC and co-general counsel to the National Reverse Mortgage Lenders Association (NRMLA), told RMD last year.

The agency has now dispensed with any additional “warning shots” by filing formal charges, sparking what will likely be another legal volley between the social media giant and the federal government, which has been seeing greater scrutiny from Democrats and Republicans alike recently.

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