Federal housing authorities have accused Facebook of engaging in housing discrimination by letting sellers and landlords exclude people of certain ethnicities and religions from viewing their ads.
On Thursday, the Department of Housing and Urban Development (HUD) charged Facebook with violating the Fair Housing Act, which prohibits discriminatory ads based on race, ethnicity, and sex when it comes to housing and employment.
"Facebook is discriminating against people based upon who they are and where they live," HUD Secretary Ben Carson in a statement. "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 enabled the discriminatory ads by giving clients the option to exclude certain people based on how they identified themselves on their Facebook profile. As a result, the company was allowing advertisers to exclude people such as parents, foreigners, and non-Christians from viewing their housing-related ads, HUD claims. The same options also let advertisers target only men or women.
According to HUD, Facebook has also been mining its users data to determine who should view what housing-related ads. The company does this to predict user response to an ad, and whether they're worth targeting. However, the same mechanism has the side effect of excluding certain users from viewing the ads.
"We're surprised by HUD's decision, as we've been working with them to address their concerns," Facebook told The New York Times.
The company previously defended the ad-targeting practice as a way to help businesses reach relevant users. But last August, HUD filed a formal complaint against Facebook, which prompted an investigation. In response, the social network stopped letting advertisers target people based on ethnicities or religion.
Last week, Facebook made another set of changes to its ad platform by dropping options that let businesses create housing, employment, and credit-related ads to target people based on age, gender, or ZIP code.
"Our policies already prohibit advertisers from using our tools to discriminate," Facebook COO Sheryl Sandberg said in the announcement, "We've removed thousands of categories from targeting related to protected classes such as race, ethnicity, sexual orientation and religion. But we can do better."
If Facebook is found guilty of enabling housing discrimination, it might be forced to pay damages and other relief. "In addition, the judge may impose fines to vindicate the public interest," HUD said.