The Department of Justice reached a settlement with Facebook owner Meta over allegations that it engaged in discriminatory advertising that violated federal housing law, the agency announced Tuesday.
The investigation stemmed from a 2019 discrimination charge by the Department of Housing and Urban Development. HUD referred the case to the DOJ after the company elected to have the charge heard in federal court, according to the release.
The DOJ claimed Meta targeted users with housing ads based on algorithms that relied partly on characteristics protected under the Fair Housing Act, like race, national origin and sex. It also alleged Meta’s lookalike or special ad audience tool allowed advertisers to target users based on protected traits.
The settlement, which still needs to be approved by the court, would require Meta to stop using its special ad audience tool for housing ads, which the government claims rely on an algorithm that discriminates based on protected characteristics like race and sex.
Facebook would be required to create a new system for housing ads by December that the government has to approve. If the government accepts the system, Meta will have to submit to regular third-party reviews to ensure it remains in compliance. The settlement will be dissolved and the case will return to federal court if the new ad system doesn’t sufficiently address the issues.
Meta would have to pay the maximum penalty under the Fair Housing Act of $115,054 under the settlement.
In a blog post following the announcement, Meta characterized the agreement as the result of “more than a year of collaboration with HUD to develop a novel use of machine learning technology that will work to ensure the age, gender and estimated race or ethnicity of a housing ad’s overall audience matches the age, gender, and estimated race or ethnicity mix of the population eligible to see that ad.”
The company said it already limits targeting options for advertisers running housing ads and that its new system would aim “to make additional progress toward a more equitable distribution of ads through our ad delivery process.”
Meta said it would also expand this approach to include ad-targeting for employment and credit, and would similarly stop using its special ad audiences targeting tool for those categories.