SAN FRANCISCO — Facebook has agreed to pay out about $5 million to settle five lawsuits and take aggressive steps to block discriminatory advertising on its platforms as part of a sweeping agreement with leading civil rights and labor organizations.
The settlement resolves claims that Facebook’s targeting technology allowed advertisers to exclude protected groups such as racial minorities, women and older workers from seeing housing, employment and credit offers. It also establishes a partnership with the National Fair Housing Alliance, the American Civil Liberties Union and the Communication Workers of America union to work collaboratively to prevent discrimination on Facebook, Instagram and Messenger.
“This is part of our commitment to take the next step and the next step and the next step working together to prevent future discrimination,” Facebook’s chief operating officer Sheryl Sandberg told USA TODAY in an interview.
With platforms like Facebook playing a substantial role in steering people to economic opportunities, Tuesday’s settlement will bring changes to how Americans can be targeted on the platform, ensuring that protected groups that already face discrimination cannot be excluded from seeing ads that can help them find a new job, an apartment or a loan, civil rights and labor organizations said.
The result of 18 months of negotiations, the deal comes as Facebook finds itself under growing pressure, not just from legal challenges, but from government probes that strike at the heart of its business. Advertising generated nearly all of the company’s nearly $56 billion in revenue last year.
In July, Facebook settled a 20-month investigation by the state of Washington into discrimination on its ad platform. Sandberg says Facebook is still facing an investigation by the Department of Housing and Urban Development. HUD did not respond to a request for comment.
At issue are the company’s targeting tools that permit advertisers to pinpoint whom they want to reach by tapping into the vast amounts of data the company collects on its more than 2 billion users.
Targeting online ads to specific demographics is standard practice for Internet companies even though critics say excluding users from viewing housing, employment and credit offer ads on the basis of race, gender, age and other protected categories violates federal and state civil rights laws.
Sandberg says Facebook’s policies already prohibit advertisers from using ad targeting tools to discriminate. And the company has removed thousands of categories that could be used to target protected classes such as race, ethnicity, sexual orientation, and religion. Now, the company is taking “very protective steps” that go beyond what the law requires to ensure discrimination does not occur on its platforms, she said.
“All of these groups raised to us, and then in the form of lawsuits as well, that they were very concerned that, in these protected areas, there could be the possibility of discrimination on our platform,” Sandberg said.
Right now, advertisers placing housing, employment and credit ads can target users of Facebook, Instagram and Messenger based on thousands of interests. By the end of the year, Facebook will narrow those interests to a few hundred such as “credit card,” “renting” or “job interview,” limiting the ability of advertisers trying to reach U.S. users to target interests that can be proxies for protected groups.
Anyone who wants to run these ads will not be allowed to target by age, gender or zip code. Facebook is also building a new tool that will allow users to search for and view all current housing ads throughout the U.S.
To monitor progress, the National Fair Housing Alliance, the ACLU and the Communication Workers of America will meet with Facebook twice a year for three years. They will be permitted to test Facebook’s advertising system to identify issues. Facebook has also agreed to study potential bias by its computer algorithms in ad targeting.
“It’s important to underscore that this is not just settling a series of issues and cases of the past but laying the map for working and going forward,” Anthony Romero, executive director of the American Civil Liberties Union, said in an interview.
The settlement comes as the social media giant fights a relentless barrage of criticism over data privacy and disinformation.
Facebook first came under fire for possible ad discrimination in 2016 when news outlet ProPublica discovered that advertisers could use Facebook’s targeting tools to conceal housing ads from African-Americans, Hispanics and other minorities. A year later, despite a pledge from Facebook that it had stopped Facebook advertisers from being able to target housing ads to whites-only, the news organization bought dozens of rental housing ads on Facebook that excluded African Americans, mothers of high school kids, people interested in wheelchair ramps, Jews, expats from Argentina and Spanish speakers.
In September, the ACLU and the Outten & Golden law firm, representing the CWA and several individual job seekers, filed charges with the Equal Employment Opportunity Commission against Facebook and a number of employers, alleging they had unlawfully discriminated by targeting job ads on Facebook to younger, male Facebook users. A similar complaint was filed against Facebook in January 2018 by CWA and individual job seekers alleging job ads excluded older workers. The CWA and individual consumers will receive nearly $3 million from Facebook.
As a part of the settlement, CWA and the workers said they would withdraw the EEOC charges against Facebook based on age and gender, but not against the more than 70 employers who used Facebook’s platform to place the ads.
The settlement also will not curtail a class action lawsuit that CWA and individual workers filed in federal court in December 2017 against hundreds of big employers such as Amazon.com and T-Mobile that they allege used Facebook’s ad platform to keep older workers from receiving job ads.
A November 2016 lawsuit claiming race and national origin discrimination in housing, employment credit ads and a March 2018 lawsuit filed by the National Fair Housing Alliance and regional housing groups challenging landlords’ use of Facebook to place housing ads that exclude families with children, women, and other protected groups will be withdrawn under the settlement.
Ad targeting has landed Facebook in hot water over the years. The technology was used by hundreds of fake accounts out of Russia to inject politically divisive ads into unsuspecting Facebook users’ news feeds in the tense climate surrounding the 2016 presidential election. Facebook also allowed ads to be targeted in offensive ways, such as to people who have expressed interest in such anti-Semitic topics as “jew hater,” “how to burn jews” or “History of ‘why jews ruin the world.'”
Facebook has struggled on issues of race and discrimination. White men make up much of its workforce, while black employees hold 3.5 percent of positions and Hispanics less than 5 percent.
Facing challenges from civil rights groups on everything from discriminatory advertising to how it moderates hate speech, Facebook agreed in May to have Laura Murphy, the former director of the ACLU’s Washington legislative office, conduct a civil rights audit.
After Murphy, the Congressional Black Caucus and others raised concerns about how housing, employment and credit ads target users, Facebook says it engaged the civil rights law firm of Relman, Dane & Colfax to review its ad tools.