The U.S. Department of Housing and Urban Development has filed charges of housing discrimination against Facebook for violating the Fair Housing Act. HUD alleges that the company’s targeted advertising encourages, enables, and causes housing discrimination since it allows advertisers to restrict who can see their house-related ads based on religion, national origin, family status, sex, and disability.
“Facebook is discriminating against people based upon who they are and where they live. Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face,” said HUD Secretary Ben Carson.
HUD also alleges that Facebook may have allowed advertisers to “exclude people based upon their neighborhood by drawing a red line around those neighborhoods on a map.” Discrimination in housing and related services (including online ads, based on religion, race, color, sex, national origin, familial status, or disability) is an offense under the Fair Housing Act.
The department is seeking “the maximum civil penalty” against company and unspecified monetary damages for each housing law it violated. HUD charges against Facebook come a day after the social media giant announced “a ban on praise, support and representation of white nationalism and white separatism” on its platforms.
Facebook said that concepts of white nationalism and white separatism are deeply linked to organized hate groups, hence the decision to ban them on its social networks. According to a statement released by the company, the ban is expected to go into effect next week.
HUD charges on Thursday took Facebook by surprise. A spokesperson for the company said, “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.”
Facebook Inc (NASDAQ: FB) shares fell 1.1% to $163.96 before markets opened. The stock has gained 26.5% since the beginning of the year through Wednesday.
Facebook Inc. Profile
Facebook Inc is the world’s largest online social network, with more than 2 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue.
Facebook refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktop. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada, and 25% from Europe. With gross margins above 80%, Facebook operates at a 40%-plus margin.