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Facebook sued by Trump administration for alleged 'discriminatory' ad practices

The U.S. Department of Housing and Urban Development sued Facebook (FB) on Thursday over alleged discriminatory advertising practices, adding to scrutiny over online activity facilitated by one of the world’s largest social media platforms.

The agency said in a statement it is charging Facebook with “encouraging, enabling, and causing housing discrimination through the company’s advertising platform” in violation of the Fair Housing Act. This prohibits prejudicial treatment in housing and related services such as online advertisements based on race, color, religion, and other identifying factors.

According to the statement, Facebook violated the act by “allowing landlords and home sellers to use its advertising platform to engage in housing discrimination.”

“Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben Carson said in the statement. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

According to HUD’s charge, “Facebook enabled advertisers to exclude people whom Facebook classified as parents; non-American-born; non-Christian; interested in accessibility; interested in Hispanic culture; or a wide variety of other interests that closely align with the Fair Housing Act’s protected classes.”

Shares of Facebook fell 0.95% to $164.30 each as of 8:36 a.m. ET.

Facebook said in a statement to Yahoo Finance Thursday that it was “surprised by HUD’s decision, as we’ve been working with them to address their concerns and have taken significant steps to prevent ad discrimination.”

“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 said in the statement.

The charge comes following a series of recent actions from Facebook aimed at altering its advertising systems to protect against discrimination. The company last week reached agreements with institutions including the National Fair Housing Alliance and ACLU on changes removing age, gender and zip code-related targeting from housing, credit and employment ads. Late last August, Facebook removed thousands of targeting options to limit advertisers from excluding audiences based on certain demographic factors.

The HUD initially filed a formal complaint against Facebook on August 13, 2018 relating to its alleged discriminatory advertising practices.

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

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