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HUD Secretary Carson accuses Facebook of enabling housing discrimination

(Richard Drew/AP)

Housing Secretary Ben Carson accused Facebook on Friday of enabling illegal housing discrimination by giving landlords and developers advertising tools that made it easy to exclude people based on race, gender, Zip code or religion — or whether a potential renter has young children at home or a personal disability.

The action, which comes after nearly two years of preliminary investigation, amounts to a formal legal complaint against the company and starts a process that could culminate in a federal lawsuit against Facebook. It stands accused of creating advertising targeting tools — which classified people according to interests such as “English as Second Language” or “Disabled Parking Permit” — that resulted in violations of the Fair Housing Act.

The move by the Department of Housing and Urban Development came on the same day the Justice Department targeted Facebook on similar issues. In that action, the government took the side of several fair-housing groups in opposing Facebook’s efforts to have a discrimination lawsuit dismissed, arguing that Facebook can be held liable when its ad-targeting tools allow advertisers to unfairly deprive some categories of people of housing offers.

Taken together, the moves mark an escalation of federal scrutiny of how Facebook’s tools may create illegal forms of discrimination, allegations that also are central to separate lawsuits regarding the access to credit and employment opportunities, which, like housing, are subject to federal legal protection. The federal actions also suggests limits on the reach of a key federal law, the Communications Decency Act, that long has been interpreted as offering technology companies broad immunity against many legal claims related to online content.

“The Fair Housing Act prohibits housing discrimination, including those who might limit or deny housing options with a click of a mouse,” said Anna María Farías, HUD’s assistant secretary for fair housing and equal opportunity. “When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it’s the same as slamming the door in someone’s face.”

Facebook said in a statement Friday afternoon, “There is no place for discrimination on Facebook; it’s strictly prohibited in our policies. Over the past year we’ve strengthened our systems to further protect against misuse. We’re aware of the statement of interest filed and will respond in court; we’ll continue working directly with HUD to address their concerns.”

Facebook is now legally bound to stop advertisers from excluding people because of their race

In March, several housing groups, led by the National Fair Housing Alliance, sued Facebook in federal district court in New York for engaging in illegal housing discrimination through its advertising tools. The company asked the court last month to dismiss the case, citing immunity because it was an “interactive computer service” protected by the Communications Decency Act.

But Geoffrey S. Berman, the U.S. attorney for the Southern District of New York, sided with the plaintiffs, arguing that Facebook was instead an “Internet content provider” under federal law because it collects and analyzes data and offers user categories that advertisers can choose, "based on demographics, interests, behaviors and other criteria.”

That means that Facebook, at least in providing online tools to advertisers, falls beyond the reach of the Communication Decency Act’s immunity provisions, which are cherished by Silicon Valley and frequently portrayed as key to the ability of the technology industry to innovate freely.

Berman wrote, “The Complaint sufficiently alleges that, for purposes of housing advertisements, the categorizing of Facebook users based on protected characteristics, and the mechanism that Facebook offers advertisers to target those segments of the potential audience, violated the FHA."

98 personal data points that Facebook uses to target ads to you

The Justice Department did not take a position on the merits of the legal claim overall, only about the applicability of the Communications Decency Act.

Lisa Rice, president of National Fair Housing Alliance, called the government’s action “a strong statement in support of our claims,” adding, "Facebook is one of the largest adverting companies in the world, and instead of using its vast resources to create more open markets, our claims assert that data is being harnessed in a way that perpetuates systemic bias in housing markets.”

After a ProPublica investigation two years ago, Facebook said it would no longer allow advertisers to target ads for housing, credit offers and employment by “ethnic affinities,” a category the social network had created to enable businesses to reach minority groups.

But the housing groups have argued that Facebook has not gone far enough. The government statement on Friday quoted this complaint in saying that the platform’s advertising tools still give landlords, developers and others the ability to target some potential renters while excluding others.

An HUD news release Friday said that Facebook’s tools, while not explicitly mentioning race, disabilities or family size, allow all of that and more for advertisers interested in targeting certain groups while excluding others from housing offers. Such groups included people interested in “assistance dog,” “mobility scooter" or “deaf culture.” The advertising tools also allowed offers to exclude people interested in “child care” or “parenting," or to target people based on their stated interest in Christianity, Hinduism or the Bible. Ads could also be tailored based on user Zip codes, the HUD release said.

The formal complaint was filed four months after Carson testified on the Hill that he would be reopening HUD’s investigation into Facebook. The initial investigation had begun during the Obama administration following the ProPublica story revealing that Facebook allowed advertisers to target housing and other ads based on race.

But Carson dropped the investigation last fall. After a public outcry, he told senators in April that he had done so because of time pressures and had always intended to revisit the case.

“Some of the suits that were being pursued — we didn’t really have time to study them,” Carson said in April. “We wanted to pull them back and have the chance to really study them.”

A HUD official said Friday that Carson’s team began taking more time to understand the merits of the Facebook case.

“They did not like the perception that they were scaling back on civil rights,” said the official, who is not authorized to speak on the record. “It doesn’t take a genius for anyone looking at Facebook to figure out that’s a problem that denies people housing. It’s hard for Facebook to justify.”

The filing of the formal complaint signifies that HUD has found enough during its initial investigation to say the department believes Facebook may have violated federal housing laws. It begins an official process that allows the company to resolve the complaint by working with HUD before the department decides to either file a lawsuit or dismiss the case.