The U.S. Department of Housing and Urban Development (HUD) announced that it was charging Facebook with violating the federal Fair Housing Act by enabling housing discrimination through its ad targeting capabilities.
"Facebook is discriminating against people based upon who they are and where they live," said HUD Secretary Ben Carson in a press release. "Using a computer to limit a person's housing choices can be just as discriminatory as slamming a door in someone's face."
HUD's civil suit accuses Facebook of unlawfully discriminating based on protected qualities such as race, color, national origin, religion, familial status, sex and disability by "restricting who can view housing-related ads on Facebook's platforms and across the internet."
Among the protected categories that HUD alleges Facebook allowed advertisers to exclude were parents, non-American-born and non-Christian users, those interested in accessibility and those interested in Hispanic culture.
Facebook shares were down 0.5% to $165.13 in early morning trading on Thursday. Shares are up 25% this year.
Facebook COO Sheryl Sandberg recently announced in a blog post that the company was eliminating the ability to target users by age, gender and zip code for advertisers of housing, job and credit services. She also said that these advertisers would not have a smaller set of targeting capabilities and that Facebook would be building a tool to search for and view all current housing ads being shown on Facebook, regardless of whether they'd been shown the ads or not.
The changes were part of a settlement with advocacy groups that included the payment of $5 million. Previously, Facebook stopped allowing advertisers for these services to target users on ethnicity after ProPublica published a report showing it had been able to buy housing ads that excluded various ethnic groups.
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