Facebook Charged With Housing Discrimination Following HUD Investigation

March 28, 2019, 1:36 PM UTC

Facebook has been hit with housing discrimination charges over the way the company allegedly operates its targeted advertising services.

In a statement on Thursday, the U.S. Department of Housing and Urban Development (HUD) said that Facebook has violated the Fair Housing Act by using its advertising platform to enable housing discrimination. HUD said that it started an investigation into Facebook’s advertising practices in August and alleges that the social network “unlawfully discriminates based on 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.”

Facebook did not immediately respond to a Fortune request for comment.

Advertising is Facebook’s lifeblood. The platform allows companies both big and small to pinpoint groups to target in advertising. The company charges those companies based on the number of people who see the ads, user engagement, and other metrics.

HUD has specific rules and regulations that require advertisers to not in any way discriminate in their housing marketing. The rules were adopted long before digital advertising, but still apply to online marketing efforts.

In its charges, HUD alleged that Facebook allowed advertisers to exclude people from seeing ads who were “classified as parents, non-American-born, non-Christian, interested in accessibility, interested in Hispanic culture, or a wide variety of other interests that closely align with the Fair Housing Act’s protected classes.” HUD also alleged that Facebook let advertisers exclude people based upon their neighborhoods.

“The Charge concludes that by grouping users who have similar attributes and behaviors (unrelated to housing) and presuming a shared interest or disinterest in housing-related advertisements, Facebook’s mechanisms function just like an advertiser who intentionally targets or excludes users based on their protected class,” HUD said in a statement.

HUD said that it will seek “relief for the harm Facebook caused and continues to cause.” A U.S. administrative law judge is expected to hear the case and could award damages and other fees to the winning party.

Prior to the HUD announcement, Facebook made changes to its advertising targeting. In August, the company removed 5,000 targeting options advertisers had used in a bid to minimize “the risk of abuse,” Facebook said. Earlier this month, Facebook COO Sheryl Sandberg announced the company’s decision to remove age, gender, and zip code targeting options for housing, employment, or credit ads.

“Housing, employment and credit ads are crucial to helping people buy new homes, start great careers, and gain access to credit,” Sandberg wrote in a blog post. “They should never be used to exclude or harm people.”