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Facebook 'surprised, disappointed' by Trump administration's lawsuit

Facebook (FB) described itself on Thursday as “surprised” by the U.S. Housing and Urban Development’s (HUD) lawsuit against the company over alleged discriminatory advertising practices, with the social platform arguing it had taken action to prevent such behavior on its site.

The department filed a complaint against Facebook on Thursday, alleging the company’s ad platform restricted who could view housing-related advertisements based on factors such as race, color, nationality, familial status and disability.

“We're surprised by HUD's decision, as we've been working with them to address their concerns and have taken significant steps to prevent ads discrimination,” a Facebook spokesperson said in a statement to Yahoo Finance.

“While we were eager to find a solution, HUD insisted on access to sensitive information - like user data - without adequate safeguards. We're disappointed by today’s developments, but we’ll continue working with civil rights experts on these issues,” the company added.

In a statement, HUD said its legal action “makes clear [that] unresolved fair housing issues remain with Facebook’s advertising platform. Until HUD can verify that Facebook’s practices are in full compliance with the law, we will continue to use all resources at our disposal to protect Americans from the harmful effects of discrimination."

The charge is the latest pain point for the social media giant, as it works to smooth over similar tensions with major institutions over the advertising activities it facilitates on its platform. In the last year, Facebook has also been forced to address numerous user privacy-related controversies.

‘Long history of discrimination’

Last week, the company reached agreements with a series of advocacy groups including the ACLU, National Fair Housing Alliance and Communications Workers of America in settlements totaling nearly $5 million.

In the wake of these settlements, Facebook announced it had made changes to its platform to help stymie discrimination accusations leveled against it by certain demographics for employment, housing and credit ads.

Some of these changes prevented those looking to post housing, employment or credit ads from being able to target by age, gender or zip code. The company also said it is building a tool to allow users to search and view all of its current housing ads in the U.S.

“There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads,” Facebook Chief Operating Officer Sheryl Sandberg said in a Facebook blog post last week.

“Our policies already prohibit advertisers from using our tools to discriminate,” she added. “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.”

Late last August, Facebook removed around 5,000 targeting options to limit advertisers from excluding audiences based on certain demographic factors. This came following HUD’s original August 13 filing, which surfaced complaints against Facebook for its alleged discriminatory advertising practices, which the agency argued ran afoul of the Fair Housing Act.

Scrutiny over Facebook’s targeted advertising practices has extended back at least a few years. The company was the subject of a ProPublica investigation published in 2016 that claimed advertisers could exclude certain groups based on “ethnic affinities” when targeting house hunters.

Following the report, Facebook released a blog post in November 2016 stating that was unveiling additional changes to enforce policies preventing its “ethnic affinity” tool from being used for discrimination. The company furthered boosted these efforts in February 2017.

Facebook’s current advertising tool requires that users click a box agreeing not to use certain targeting capabilities, if they advertise in a space involving a protected class.

“While we are asking all advertisers to review and accept our non-discrimination policy, it’s especially important for advertisers running housing, employment or credit ads,” Facebook said in its prompt to users as of Thursday.

“Opportunities presented in these types of ads must be inclusive and extended to all groups of people, regardless of certain personal attributes,” it added.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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