Federal government charges Facebook with housing discrimination because of its targeted advertising

The federal government charged Facebook Thursday with allowing its massive trove of personal demographic data to enable housing discrimination, an allegation the company fiercely denied.

The allegations set up a lengthy legal battle between the Trump administration and one of the world's largest social media companies. At issue is whether the company's sophisticated algorithms and artificial intelligence capability still allows landlords to reach certain demographics and not others with rental advertisements.

"Facebook is discriminating against people based upon who they are and where they live. Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face," tweeted Ben Carson, head of the U.S. Department of Housing and Urban Development, known as HUD.

Facebook said it was surprised by the charges, particularly after last week's announcement of a court settlement on the same issue. The company had already agreed to shield race-based data to landlords and creditors looking to advertise, and said it would go a step further by shielding zip code, gender and age.

"We're disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues," said a company spokesman.

The action by HUD suggests the court settlement wasn't enough. The agency on Thursday accused Facebook of violating the Fair Housing Act by "encouraging, enabling and causing housing discrimination" with its advertising platform. Officials said Facebook specifically allowed discrimination 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."

The Fair Housing Act of 1968 — also known as The Civil Rights Act of 1968 — states that its illegal "to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin."

In 2016, ProPublica found that Facebook allowed advertisers to exclude anyone with an "affinity" for African-American, Asian-American or Hispanic content. The company has said it removed that option for landlords, employers and creditors about a year ago.

Last week, Facebook and fair housing advocates announced it had reached a legal settlement on accusations that Facebook enabled discrimination. As part of the deal, Facebook agreed to block landlords and creditors from using certain demographic data including a person’s zip code, gender and age, when buying online advertisements.

According to Facebook, the federal government wanted access to the "sensitive information" it keeps on its members "without adequate safeguards" and Facebook refused. HUD's top lawyer said that wasn't good enough.

"Just because a process to deliver advertising is opaque and complex doesn't mean that it exempts Facebook and others from our scrutiny and the law of the land," said HUD General Counsel Paul Compton.

Facebook said in a blog post last week by Sheryl Sandberg, the company's chief operating officer, that it already prohibited certain categories from being used in advertising such as race, ethnicity, sexual orientation and religion.

"Our policies already prohibit advertisers from using our tools to discriminate," Sandberg wrote. "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."