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Could Violating Federal Housing Laws Finally Bring Facebook Down?

The feds hound Facebook for ads that allegedly violate the Fair Housing Act.

Mohamed Ahmed Soliman/Dreamstime.comMohamed Ahmed Soliman/Dreamstime.comFrom Democrats incensed about Russian ad buys to Republicans convinced that the site censors Diamond and Silk, Facebook has been on the receiving end of a lot of hate lately. Yet the issue that could finally bring the hammer down on the social media giant might be its alleged violation of housing regulations.

On Friday, the Department of Housing and Urban Development (HUD) announced that it was filing an official complaint against Facebook for enabling advertisers to run discriminatory housing ads in violation of the 1968 Fair Housing Act (FHA).

"When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face," Assistant HUD Secretary Anna María Farías said in a press release.

That same day, the Department of Justice (DOJ) weighed in on the side of a coalition of fair housing groups suing Facebook for the same reason. Both actions strike the heart of the site's business model: selling targeted ads based on users' information.

Stopping discriminatory ads sounds like a laudable goal. But there's no evidence at all that the site has facilitated any actual housing discrimination. The most likely results of this crackdown are that the site's users will get less information about housing and the government will expand its ability to regulate online behavior.

Understanding why that's so requires a bit of background.

Facebook's housing woes started in October 2016, when ProPublica published a story on how it was able to use the site's ad targeting categories to purchase housing-related ads that expressly excluded users whose "ethnic affinity" was listed as "African American," "Asian American," or "Hispanic." This seemed to be an explicit violation of the FHA, which prohibits publishing any "advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin."

In response, Facebook promised it would update its terms of service for advertisers and build tools that would allow it to disable its ethnic affinity option for ads offering housing. In February 2017, it rolled out those fixes—only to be hit by a second ProPublica article in November detailing how its reporters were able to purchase housing-related ads that specifically excluded African Americans, mothers with kids, Spanish speakers, and a host of other protected classifications.

This second article prompted the National Fair Housing Alliance (NFHA), working with fair housing groups in Miami and San Antonio, itself to purchase phony Facebook ads that excluded categories of users they say fall under the protection of the FHA.

In March of this year, the NFHA filed a lawsuit against Facebook for discriminating not just against racial minorities, but on the basis of users' familial status (by running NFHA-purchased ads that excluded "soccer moms," "corporate moms," "fit moms," etc.) or national origin (because of ads that excluded users with an "interest in Telemundo").

Neither ProPublica's investigation nor the NFHA's lawsuit identified any parties other than themselves that had purchased discriminatory housing ads on Facebook, nor did they show anyone who has been denied housing as a result of such discriminatory ads.

Rather, the damages the NFHA describes in its lawsuit are either theoretical—that an advertiser could use Facebook's targeting tools to push discriminatory ads—or were inflicted by the NFHA on itself. Their complaint demands compensation for all the time and resources they've put into investigating Facebook's ad practices and educating the public about FHA-compliant social media ads, and for the damage Facebook has done to its general mission of promoting fair housing.

Facebook, for its part, demanded in June that the case be dismissed, arguing that the plaintiffs failed to show real damages. Importantly, Facebook also argued that it is protect by Section 230 of the Communications Decency Act, which until recently has been treated as granting broad immunity to platforms for the content published by third parties on their site.

It was that defense that got the DOJ to intervene. As Reason's Elizabeth Nolan Brown has covered extensively, the federal government is already trying to whittle away at the immunity offered by Section 230 as part of its misguided war on sex trafficking.

The NFHA's lawsuit gave it another opportunity to weigh in on this topic. In a "statement of interest" issued last Friday, the DOJ argued that because Facebook provided the tools necessary to both create and spread discriminatory housing ads, it was not a neutral platform but was actively providing FHA-violating content.

HUD, in its related complaint from last week, adopted the same arguments made by the NFHA lawsuit—that allowing ads that exclude protected classes or close proxies for protected classes was itself a violation of the FHA. That complaint opens a HUD investigation into Facebook, which could lead, as mentioned, to administrative fines, additional regulations, or a DOJ lawsuit.

Yet what good would federal sanction of Facebook really accomplish? So far we've seen only theoretical harms—and very real-world costs. Though the FHA's prohibition on discriminatory advertising is pretty brief, amounting to a single sentence in a 26-page law, HUD's interpretation of this prohibition is quite sweeping. Anything from the geographic placement of billboards to the demographic makeup of models in advertisements could lead an ad to be declared discriminatory under the department's guidelines. HUD's complaint makes this clear. It takes issue not just with ad categories that are on their face discriminatory, but also tenuously related proxy categories, such as anyone listed as interested in the "Hispanic National Bar Association," "child care," or "accessibility" (which excludes disabled people), or even ads exclusive to certain zip codes.

Requiring Facebook to police housing ads for the mere appearance of something that could be construed as discriminating would be onerous. Looking at the costs of enforcement, and stripped of traditional Section 230 immunity, Facebook may decide to just stop selling housing ads, period.

We've already seen similar events elsewhere. Google stopped running political ads in Maryland and Washington after those states, whipped up by Russia fears, imposed stringent new reporting requirements on the purchases of those ads.

A more likely scenario is that Facebook will keep the housing ads but become excessively cautious about what kind of tailoring it allows. Obviously, ads aimed at certain zip codes would have to go (no matter how useful that is for selling something as location-dependent as housing). So too would anything even remotely related to race or disability—e.g., interests, such as "hiking" or "mountain biking," that indicate the absence of a disability.

Stripped of the tools that make Facebook a valuable ad platform in the first place, landlords and real estate agents will be less likely to place ads there, meaning Facebook's users will be less likely to see them.

Thus, the federal government and folks over at NFHA may well end up causing the very harm that they're trying to prevent.

This won't be the end of the world. Renters, landlords, and home buyers and sellers can still easily find each other on other platforms, such as Craigslist, Padmapper, and ApartmentList. There are always traditional classified ads too. Yet in the absence of showing any real harm, and with the unintended consequences that aggressive enforcement would create, I see no good that could come from sanctioning Facebook.

Photo Credit: Mohamed Ahmed Soliman/Dreamstime.com

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  • damikesc||

    Facebook, for its part, demanded in June that the case be dismissed, arguing that the plaintiffs failed to show real damages. Importantly, Facebook also argued that it is protect by Section 230 of the Communications Decency Act, which until recently has been treated as granting broad immunity to platforms for the content published by third parties on their site.

    Given their "oversight" of content on their service...no, they really are not a platform. They are a publisher. Ditto most social media services. If FB can oversee "fake news", that makes them no longer a platform.

    Sometimes, not being woke and silencing voices protects you. It immunizes you from this AND it won't get people WANTING to see you get fucked over.

  • Magnitogorsk||

    Well on one hand Facebook doesn't publish content, but on the other hand they were meanie heads to some right wing whiners, so they are definitely publishers for the purpose of applying massive government overreach to a company I don't like.

  • Rossami||

    Why, precisely, is this Facebook's problem? The scope of HUD is against those who provide housing - landlords and sellers. The law they are citing does not, as far as I can tell, put any burden or obligation directly on the media that those providers use.

  • BYODB||

    Something something prior restraint...

  • Don't look at me.||

    Who has more money to confiscate?

  • Happy Chandler||

    Fair Housing Council of SFV v. Roommates.com
    The platform is liable when they offer dropdown lists of options. This is not exactly the same, because it's options for who gets to see the ads, not the information that goes into them.

    It's complicated. Facebook is providing the mechanisms that can be used to discriminate on housing, and because the mechanisms are hidden, there is no way to tell how widespread it is.

  • perlchpr||

    Facebook is providing the mechanisms that can be used to discriminate on housing

    Except, they aren't. They're providing the mechanisms to target advertising to specific audiences.

    Like buying an ad in, say, "Jet" magazine.

    Just because I'm required to not discriminate against a potential tenant for being an IV drug user if they happen to apply, does that require me to go and post my vacancy specifically at the methadone clinic?

    Or, to make it less ludicrous, just because I'm required to not discriminate against any potential single mother that hears about the listing, am I required to specifically advertise my vacancy at the strip club?

  • cravinbob||

    You need to read what is discrimination in terms of the laws and what it covers. Reason has a lot of commenters that I am surprised even look at the website. You are certainly a moron and not at the top of your class.

  • Rossami||

    re: Fair Housing Council of SFV v. Roommates.com

    Why am I not surprised that garbage decision came from the Ninth Circuit. Do you happen to know if Roommates.com attempted to appeal to the Supreme Court?

  • Rossami||

    Wait a minute. I think I stopped researching too soon and was commenting based only on their appeal of the Sec 230 ruling. The case was remanded, decided and again appealled to the Ninth Circuit. If I am reading that second decision correctly, the FHA's and FEHA's arguments were rejected and Roommates.com was vindicated.

    Unless there's an en banc appeal that I can't find, I don't this this case advances your argument, Happy. The platform was not held liable for the dropdown options they offered.

  • Happy Chandler||

    Because precluding individuals from selecting roommates based on their sex, sexual orientation and familial status raises substantial constitutional concerns, we interpret the FHA and FEHA as not applying to the sharing of living units. Therefore, we hold that Roommate's prompting, sorting and publishing of information to facilitate roommate selection is not forbidden by the FHA or FEHA. Accordingly, we vacate the district court's judgment and remand for entry of judgment for defendant. Because the FHCs are no longer prevailing, we vacate the district court's order for attorney's fees and dismiss the cross-appeals on attorney's fees as moot.

    The appeal only seems to hinge on the fact that it was a roommate situation and that FHA and FEHA do not apply to roommate selection. They did not reverse the Section 230 ruling.

  • Fuck you, Shikha (Nunya)||

    It's complicated is HC's way of saying it feels right to hold them accountable to the actions of others, real or imagined.

  • Cyto||

    That was exactly my take. Do they prosecute the New York Times if a housing provider tries to target or avoid an ethnicity?

    Exactly how are advertising platforms supposed to comply with this sort of philosophy. They would have to have experts in every area of the law in every jurisdiction regarding every possible subject.

    If Ford starts selling cars using misleading EPA figures, does Facebook have to have experts on EPA and FTC regulations related to automobile sales and manufacturing?

    What about skin care products? Do they need to hire experts in health claims, dermatology and FDA regulations?

    Plus, they'd need California law experts for every one of those items. And New York. And San Francisco.

    It just seems ridiculous. They wouldn't come after CBS for running an ad from Ford that violates federal laws, they'd go after Ford.

    Why are we in "but on the internet" land on this?

  • Happy Chandler||

    Newspapers have faced lawsuits for this.
    Facebook's liability stems from them providing the options. They are not responsible for the text, as non digital oldies are. Roommates.com established that.

  • Gilbert Martin||

    "On Friday, the Department of Housing and Urban Development (HUD) announced that it was filing an official complaint against Facebook for enabling advertisers to run discriminatory housing ads in violation of the 1968 Fair Housing Act (FHA)."

    Which in itself is a violation of freedom of speech enumerated in the 1st Amendment.

    The idea that commercial speech is a separate and less protected form of speech is merely another example of courts dreaming up something out of whole cloth that's not actually in the text of the Constitution.

  • Brian||

    They eat their own.

  • Just Say'n||

    They could just blame it on the Russians and then Reason will just print "The Nefarious Nexus Between Federal Housing Laws and Russia!"

  • buybuydandavis||

    "Facebook also argued that it is protect by Section 230 of the Communications Decency Act, which until recently has been treated as granting broad immunity to platforms for the content published by third parties on their site."

    They exert editorial control. They should be just as liable for content as any other publisher.

    If they want to have the protections of a common carrier, they should be required to *behave* like a common carrier. No special liability exemptions.

  • damikesc||

    Indeed. Most social media is running very afoul of carrier vs publisher distinctions.

  • Happy Chandler||

    It's funny how case after case that alleges this gets dismissed on Section 230.

    Section 230 allows editorial control. Otherwise the internet basically wouldn't exist outside a bunch of trolls goatse'ing each other.

  • Finrod||

    Precisely. They need to be held liable for all the odious views they don't censor.

  • See.More||

    In March of this year, the NFHA filed a lawsuit against Facebook for discriminating not just against racial minorities, but on the basis of users' familial status (by running NFHA-purchased ads that excluded "soccer moms," "corporate moms," "fit moms," etc.) or national origin (because of ads that excluded users with an "interest in Telemundo").

    Ugh...

    Advertisers using Facebook's tools to not show housing ads to certain people does not equal Facebook discriminating against anyone. IF there is a discrimination case to be made, it would be against housing advertisers that use Facebook's tools to choose their audience.

  • Juice||

    or national origin (because of ads that excluded users with an "interest in Telemundo")

    I don't know why that made me laugh. This is what your government does all day, I guess.

  • perlchpr||

    Even that isn't "discrimination".

    Am I showing discrimination against black people if I don't advertise specifically in "Jet" magazine?

    Am I showing discrimination against Hispanics if I only advertise in "Jet" magazine?

    Am I discriminating against everyone who doesn't speak Spanish if I only advertise in the Spanish language newspaper?

    Am I discriminating against everyone who doesn't speak English if I only advertise in the English newspaper?

  • MatthewSlyfield||

    I wonder, is there any record of HUD ever suing newspapers for allowing discriminatory classified adds for housing?

    If not, what makes Facebook different other than, it's on the internet?

  • MatthewSlyfield||

    Is there any record of HUD suing newspapers for allowing discriminatory classified ads for housing? If not, what makes Facebook different?

  • Just Say'n||

    www.supreme.findlaw.com/legal-.....ys-no.html

    Craigslist was sued in 2006, but the case was dropped because they credibly showed that they never censor advertisements or postings on their site

  • Juice||

    But now they do.

  • Just Say'n||

    Which I guess would complicate the matter for Craigslist

  • Happy Chandler||

    No, they did censor those ads on a complaint basis. The case said that Section 230 has no requirement that they don't.

    This case has no impact on Craigslist.

  • Just Say'n||

    Do you know how to read Chandler Bing? Because you pretty much addressed nothing that was mentioned. Congrats on being insane

  • Happy Chandler||

    The case hinged on if Section 230 applied to the FHA. The plaintiffs argued that Congress didn't mean to immunize against FHA claims. The court said "That's what the law says".

  • Fuck you, Shikha (Nunya)||

    Like a tax versus a fee?

  • BILKER||

    "The court said "That's what the law says".
    if that is true then why does the judiciary allow facebook, banking industry entities and federal, state and local laws descriminating against a legal business and industry expressly addressed in the Constitution of the US and the Bill of Rights, the second amendment.

  • MatthewSlyfield||

    Perhaps, but there is no equivalent to section 230 to protect newspapers that publish classified ads with illegal content.

  • Happy Chandler||

    http://www.justice.gov/opa/pr/.....-newspaper

    First one I found. Justice Department, not HUD, if it makes a difference.

  • MatthewSlyfield||

    This lawsuit arose as a result of complaints filed with HUD by a fair housing group and a woman with three children who was searching for housing for her family.

    I'd say it counts.

  • lap83||

    "When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face," Assistant HUD Secretary Anna María Farías said in a press release.

    this should be a very persuasive argument since Facebook users are known for promoting nothing but harmony and inclusiveness

  • BYODB||


    "When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face," Assistant HUD Secretary Anna María Farías said in a press release.


    Advertisers always discriminate, duh. That's the entire business of advertising.

  • BYODB||


    Importantly, Facebook also argued that it is protect by Section 230 of the Communications Decency Act, which until recently has been treated as granting broad immunity to platforms for the content published by third parties on their site.


    Well, that ship has sailed anyway.

  • TrickyVic (old school)||

    ""That's the entire business of advertising."'

    Particularly targeted advertisement. They say it's the reason they want our data.

  • BYODB||

    All advertising is targeted. If it wasn't targeted, it's lighting money on fire. Most advertising firms don't like to light money on fire. Admittedly, sometimes the target audience is a pretty loose definition but that still counts as targeted advertising.

  • Happy Chandler||

    *unlawfully* discriminate.

  • BYODB||

    I see you have no idea how advertising works, which seems to track with your knowledge base on every other subject.

  • Happy Chandler||

    Right. The FHA is not a thing.

  • Fuck you, Shikha (Nunya)||

    Do you ever notice how most folks are talking about the merits or consistency of existing law and you only speak to the proper method to apply it most heavy handed?

  • Happy Chandler||

    I notice others want to bring the power of the state against Facebook with a made up law. Which stalker are you a stalk puppet for?

  • BILKER||

    true. all the personal information on your browsing preferences is sold to advertizers by zuckerberg for which he was given an award. Assange did the same thing for free and is a wanted man. i guess it's illegal to do that if you're a Belgian.

  • Sevo||

    "...an official complaint against Facebook for enabling advertisers to run discriminatory housing ads in violation of the 1968 Fair Housing Act (FHA)."

    Next up: Complaint against printing ink manufacturers for under the same claims.

  • Rich||

    This.

    And WTF is "filing an official complaint"? Is that worse than being censured by Congress?

  • MatthewSlyfield||

    It's the start of formal process by HUD against Facebook.

    You could have tried reading the linked HUD press release which explains this.


    HUD Secretary-Initiated Complaints

    The Secretary of HUD may file a fair housing complaint directly against those whom the Department believes may be in violation of the Fair Housing Act. Secretary-Initiated Complaints are appropriate in cases, among others, involving significant issues that are national in scope or when the Department is made aware of potential violations of the Act and broad public interest relief is warranted or where HUD does not know of a specific aggrieved person or injured party that is willing or able to come forward. A Fair Housing Act complaint, including a Secretary initiated complaint, is not a determination of liability.

    A Secretary-Initiated Complaint will result in a formal fact-finding investigation. The party against whom the complaint is filed will be provided notice and an opportunity to respond. If HUD's investigation results in a determination that reasonable cause exists that there has been a violation of the Fair Housing Act, a charge of discrimination may be filed. Throughout the process, HUD will seek conciliation and voluntary resolution. Charges may be resolved through settlement, through referral to the Department of Justice, or through an administrative determination.
  • Just Say'n||

    It would appear that newspapers have faced similar complaints and those have held. Craigslist had a complaint in 2006 that they won because they proved that they exercised no editorial control over advertisements or their platform.

  • Happy Chandler||

    Craigslist did exercise editorial control. That has nothing to do with it.

  • Just Say'n||

    In 2006 they did not exercise editorial control. Christ, all this because you love their censorship. Give it a rest Chandler Bing

  • Happy Chandler||

    1) Yes they did. It's in the court case.
    2) Private companies can't censor.

  • Cyto||


    censorship
    ˈsensərSHip
    noun
    1. the suppression or prohibition of any parts of books, films, news, etc. that are considered obscene, politically unacceptable, or a threat to security.

    Anyone can censor. Sure, we usually think about censorship in terms of the first amendment and government power. But censorship does not in fact require the government.

  • Fuck you, Shikha (Nunya)||

    Alex Jones might disagree.

  • perlchpr||

    2) Private companies can't censor.

    This is the stupidest new talking point the left has come up with recently.

    Of course private companies can censor. It's just not a 1A issue when they do it.

  • MatthewSlyfield||

    Without section 230 (for which there is no equivalent for print newspapers) their lack of editorial control would have been irrelevant.

  • Dillinger||

    go HUD?

  • ||

    finally

    I'm sorry...but you want this to happen? Why?

  • Mickey Rat||

    I do think the federal bureaucracy finding a way to get its regulatory clutches on Facebook content is a bad thing. However, i cannot help to be darkly amused by the idea that Facebook's fetters are being forged from public accommodation law.

  • EscherEnigma||

    Meh. I'll wait till discovery. That'll probably reveal whether or not this has actually happened or not.

  • EscherEnigma||

    Second thought: seeing as y'all keep decreeing that Facebook ads don't influence anyone anyway, it should be a breeze for Facebook to show that there is no harm.

  • Happy Chandler||

    Can anyone promoting the idea that editorial control creates liability either show:
    Where in the law it is mentioned

    OR

    One case where editorial control (as opposed to providing words) led to liability?

    I can repost any libelous article on these comments sections. As long as I don't add any words, you can't sue me, because I'm a user of a digital platform.

    I could libel anyone here. You could sue me, but you can't sue Reason, because they are the platform. Even though they have a "Report Spam" button, which I'm assuming means they edit out spam links.

  • Cyto||

    It hinges on "your speech"

    You, as an internet platform user are responsible for what you post. You can indeed be sued if you post libelous material here.

    But you can also be sued if you repost someone else's libel, unless you have some sort of reasonable defense that renders it not libelous - like you were quoting it in order to refute it. Being a user of a digital platform isn't a protection, as far as I know.

    Now, if you were a robot that automatically reposted tweets from "@I_am_offensive" and that twitter user posted libelous material, you'd probably get by without liability.

    But if you said "hey, this is worth sharing with everyone" and posted it yourself... yeah, I think you own those words, unless you added something like "I do not agree with this" or somesuch.

    **not only is this not legal advice, it very likely has fatal flaws from a legal point of view.

  • Happy Chandler||

    Wrong. AOL had a deal to republish Drudge. They were not responsible for the libel that Drudge made. This was not an automated feed or anything.

  • Happy Chandler||

    The only case I found easily with an individual is Barrett v Rosenthal, which was a California State case, which held an individual not liable for reposting libelous material. So, it's not national precedent but I can't find any cases that found contrary.

  • vek||

    UGH. The fact is that we need to end all this nonsense altogether. People SHOULD be able to discriminate against who they rent their property to. If a Nazi only wants to rent to white people, he should be able to. If a Black Panther only wants to rent to another brotha, he should be able to.

    The fact is the vast majority of people won't do it, and it won't make shit all of difference. Then there's the fact that if you're a black guy, do you REALLY want to be paying a closet Nazi money anyway because he couldn't legally refuse you?

    In Washington, and especially Seattle, they have passed a whole fuck ton of insane laws with respect to rentals. You now have to rent to THE FIRST QUALIFIED CANDIDATE you happen to receive, as per your objective criteria (credit score etc) posted. In other words you can't choose the person who seems most responsible, or who you click with personally, even if you're just a single person who owns a single rental. Result? People requiring excessively high criteria to bar anybody who is not vastly over qualified to rent your property.

    All of this protected class shit needs to go. Bring back Freedom Of Association! It will sort itself out fine.

  • Priscilla King||

    Whether Facebook is deliberately facilitating discrimination or not, its collection of real-world contact information *is* being used for all kinds of bad purposes already, and could be used for more and worse. *No* site should be allowed to display users' real legal names, addresses, pictures of homes or children, etc. Zuckerberg may not be personally involved in the rumors, innuendos, gossip, and general cyberbullying, but he should know that putting real contact information online is enabling that.

    Say I have your car keys, and I hang them on your car mirror and go into the mall. I'm not the car thief, in that case--but I'm not exactly innocent, either.

    Web sites that store Americans' identity/contact information are hanging our car keys on our car mirrors.

  • UnrepentantCurmudgeon||

    "Though the FHA's prohibition on discriminatory advertising is pretty brief, amounting to a single sentence in a 26-page law, HUD's interpretation of this prohibition is quite sweeping."

    Not unlike SCOTUS' interpretation of the Commerce Clause, I'd say

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