Behind HUD’s Housing Discrimination Charges Against Facebook

On Thursday, the U.S. Department of Housing and Urban Development announced charges against Facebook for violating fair housing law. According to the charges, Facebook lets advertisers discriminate against users by screening who can see ads for housing on its marketplace platform for listings.

Facebook gives advertisers a wide array of tools to target potential buyers or renters and limit or block others from seeing ads on the marketplace. National lenders, real-estate agents, and landlords have the ability to target what Facebook describes as the “eligible audience”—the pool of users with specific characteristics who can see an ad—and an even more narrowly tailored “actual audience” of viewers who will see the ad.

The charges from HUD outline powerful Facebook tools that enable allegedly sweeping violations of the Fair Housing Act. Simple drop-down menus with hundreds of thousands of options for advertisers help them to sidestep renters or buyers of almost any conceivable characteristic. Facebook users can block people from seeing housing listings who describe themselves as “moms of grade school kids” or “foreigners,” for example, or list their interests as “hijab fashion” or “service animals”—or any other number or combination of categories, including all those protected under federal law, according to the HUD complaint.

A toggle button that excludes men or women from seeing an ad facilitates potential housing discrimination at an enormous scale. The charges even describe a mapping tool that allows advertisers to block people from seeing the ad by drawing a red line around those areas, an iteration of the historic and illegal practice of redlining updated for the social-media age.

“Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face,” said HUD Secretary Ben Carson in a statement.

One of the reasons HUD is filing this complaint is because people affected by Facebook’s discrimination may not know it—and thus cannot take their own action against Facebook. When a door slams in a rental applicant's face, the injured party knows it right away. But the same can’t be said of individuals on Facebook. HUD’s secretary has the authority to bring a complaint even when an injured party cannot be identified, which is the power that Carson is yielding in its action against Facebook.

The department filed charges just a day after the social-media titan announced a ban against content that supports white nationalism or white separatism—a step that many critics said came far too late. In the immediate aftermath of the New Zealand mosque massacre, which the shooter streamed live over Facebook, the company removed 1.5 million uploaded videos of the attack within 24 hours.  

This is not the first time that Facebook has faced a lawsuit over its housing marketplace. Last year, the National Fair Housing Alliance led a lawsuit against Facebook that claimed that “[a]dvertisers can target users based on information as general as geographic location, or as specific as their birthday.” Prior to its lawsuit, the National Fair Housing Alliance created a fake rental ad for an apartment to test the scope of Facebook’s “include” and “exclude” tools under its Ad Manager functionality. Facebook approved an ad to be advertised across the U.S. that excluded African Americans and Hispanics from its potential audience.

Facebook and the National Fair Housing Alliance reached a settlement in that case last week. As a result, the company agreed to make eight major changes to its marketplace, including the creation of a separate portal for ads for housing, employment, and credit that abides by federal law. Facebook further agreed to a $500,000 credit for consumer-education ads for four of the plaintiff organizations.

Both the National Fair Housing Alliance and HUD took action after a 2016 investigation by ProPublica revealed that Facebook allows advertisers to exclude users based on race. Under the Obama administration, HUD opened an investigation into housing practices on Facebook’s platform in 2016. Carson suspended that inquiry after taking office, but he filed another complaint against Facebook back in August. Today’s charges represent the culmination of that inquiry.

The company may face severe consequences from the HUD charges. The department is seeking the maximum civil penalty against Facebook for violating the Fair Housing Act’s protections against discrimination on the basis of race, color, religion, sex, familial status, national origin, or disability—and HUD aims to award full damages to any aggrieved individuals harmed by Facebook’s alleged discrimination.

The charges will be heard before a U.S. administrative law judge, unless either party decides to take the case to federal court. If it escalates, a federal judge could award punitive damages in addition to fines on behalf of the public interest and other forms of relief.

During his tenure as housing czar, Carson has been reluctant to use his power to pursue housing discrimination. As secretary, he has dialed back departmental rules on racial discrimination and promoting fair housing. The complaint that Carson filed against Facebook in the fall is the only one he has initiated as HUD secretary, a departure from practices under previous leaders.