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Facebook comes under fire for housing discrimination and redlining

Sarah Paynter

The U.S. House Committee on Financial Services raised concerns that Facebook’s proprietary algorithms could perpetuate housing discrimination, despite the social media company’s recent anti-discrimination measures, in a hearing Wednesday.

Even though advertisers do not select discriminatory filters, like age or race, to select who sees housing ads, Facebook’s algorithm allegedly aims to optimize ads by targeting demographic groups, said Committee Chairwoman Maxine Waters (D-Calif.). Zuckerberg said Facebook can’t assess whether their policies disproportionately impact minorities’ housing opportunities because Facebook does not collect racial or ethnic data on users.

The U.S. Department of Housing and Urban Development began investigating Facebook’s algorithm and data collection in March. Facebook denied HUD complete access to user data for its investigation, raising concerns over the company’s lack of transparency and governmental oversight.

“Technological innovations have created new opportunities for discrimination in U.S. housing markets that may be harder to spot, investigate, and attribute to any particular individual when proprietary algorithms are making decisions that have systemic impacts,” the committee wrote in a memo preceding the hearing.

WASHINGTON, DC - OCTOBER 23: Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook's proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy. (Photo by Chip Somodevilla/Getty Images)

Zuckerberg said that Facebook’s legal team would comply with valid subpoenas about how housing companies might have discriminated, but he did not directly answer whether Facebook will agree to produce information about the algorithm it uses to decide which ads users receive.

Facebook has banned filtering by race, gender, age or ZIP code on at least 80% of housing ads and plan to complete the remaining 20% of ads by the end of the year, Zuckerberg said during the hearing.

On top of that, even if a Facebook user is not selected to see an ad, Facebook users can now proactively search and view all housing ads on Facebook, he said. Facebook’s housing ad policy change was part of a March settlement with the National Fair Housing Alliance over housing discrimination.

Facebook has extended the policies to employment and credit ads, and the company has employed an ongoing civil rights audit by Laura Murphy, former director of the American Civil Liberties Union Washington legislative office.

“Facebook's algorithm will sometimes deliver the advertisements… [to] a small section of that audience that they [Facebook] feel are most likely to answer to the ad,” Representative Bill Foster (D-Ill.) told Yahoo Finance. Foster has proposed legislation to broaden oversight and regulations on data, requiring commercial data operators with over 100 million active monthly users to disclose the types of data collected, its value, and contracts with third party data collectors. The bill would also enable users to delete some or all of their personal data from commercial databases.

Facebook accused of redlining

Despite the changes, Zuckerberg faced pointed criticism over the impact of Facebook’s advertising platform on housing. Facebook’s use of ZIP codes to filter ads brought criticism of redlining, or the practice of discriminating against races using geographic exclusion.

“You have even enabled the practice of this dreaded redlining of certain communities, restricting them from housing and employment opportunities… We in Congress have worked hard for the past 50 years to eliminate the very racial discrimination practices that your platform is guilty of,” said Representative David Scott (D-Ga.).

Representative Joyce Beatty (D-Ohio) grilled Zuckerberg on the definition of redlining, along with his knowledge of Facebook’s civil rights audit, Facebook’s civil rights task force and other civil rights issues.

“It’s almost like you think this is a joke, when you have ruined the lives of many people, discriminated against them,” said Beatty. “You should have known better, and maybe if you had real diversity or inclusion on your team, somebody in that room would have said...how you were redlining, or using ZIP codes to eliminate people from getting information.”

Representative Katherine Porter (D-Calif.) also questioned Facebook’s decision to announce a $1 billion donation to affordable housing, an announcement the company made the evening before the hearing. The money will help create up to 20,000 new housing units in California over the next decade, particularly in California’s San Francisco Bay Area, Menlo Park, San Mateo County, and Santa Clara County, according to a statement by David Wehner, Facebook’s chief financial officer.

Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter

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