Major Social Media Platform Limits Demographic Targeting by Advertisers, But Faces HUD Charges

On March 19, 2019, as a result of a settlement between a major social media platform, civil rights organizations, labor groups, and individual plaintiffs, the platform will implement changes to its ad policy to prevent advertisers for housing, employment or credit from targeting ads in a way that may discriminate based on race, national origin, ethnicity, age, sex, sexual orientation, disability, family status, or other characteristics covered by federal, state, and local civil rights laws.  Plaintiffs in five separate cases alleged that the “ad platform enabled advertisers to exclude certain users from seeing housing, employment, and credit opportunities in a discriminatory fashion in violation of federal, state, and/or local civil rights laws.”  Among other changes agreed to as part of the settlement, the platform has agreed that:

• An
  advertiser who wants to run housing, employment or credit ads will no longer be
  allowed to target who views those ads by age, gender, or zip code;
• Housing,
  employment, and credit ads will not have targeting options that describe or appear to be related to personal
  characteristics or classes protected under anti-discrimination laws; and
• The
  platform’s “Lookalike Audience” tool, which helps advertisers identify users
  who are similar to the advertisers’ current customers or marketing lists, will
  no longer consider gender, age, religious views, zip codes, platform membership,
  or other similar categories when creating customized audiences for housing,
  employment, and credit ads.

As part of the platform’s changes in how it manages housing, employment and credit ads, it also announced that it is developing a tool so that consumers “can search for and view all current housing ads in the US targeted to different places across the country, regardless of whether the ads are shown to you.”

Meanwhile, on March 28, 2019, HUD charged the same social media platform with violating the Fair Housing Act by targeting or excluding certain users—based on their protected classes—from viewing housing-related advertisements.  According to HUD, the social media platform collects information about its users and sells advertisers the ability to target housing-related advertisements to people who “share certain personal attributes and/or are likely to respond to a particular ad.” 

Specifically, HUD alleges that the platform determines which users will see an ad through a two-phase process.  The first “ad-targeting phase” allows advertisers to select the attributes that users who will see their advertisements must have or may not have.  These attributes include attributes such as, “women in the workforce,” “foreigners,” “Puerto Rico Islanders,” or “Christian.”  HUD also alleges that the platform allows advertisers to draw a “red line” around specific areas on a map to exclude people who live there from seeing a particular ad.  The second “ad-delivery phase” groups users by shared attributes to create a target audience most likely to engage with the ad, even if the advertiser would prefer a broader audience, which, according to HUD, inevitably creates “groupings defined by their protected class.”

HUD alleges that the targeted and delivery ad processes function “just like an advertiser who intentionally targets or excludes users based on their protected class” in violation of the Fair Housing Act.  In addition to injunctive relief, HUD seeks damages for “any aggrieved persons” and civil money penalties.