Facebook headquarters in Menlo Park.
Beck Diefenbach/Reuters

It all goes back to how the social media company collects, shares, and sells user information.

Updated: March 27, 2018 Facebook submitted a statement in reply to the lawsuit.

Facebook is in the midst of a crisis—and it’s only getting worse.

Yesterday, Cook County in Chicago announced that it is suing the company for violating a local fraud law. It joins a handful of other lawsuits against the social media company after the personal information of about 50 million of its users was reportedly obtained, and used for political gains by a company working for consultants for the presidential campaign of Donald Trump. But that’s not all. Facebook is now being sued on another, related front: the use of its large troves of private user data for housing discrimination.

The National Fair Housing Alliance (NFHA) filed a lawsuit Tuesday, which argues that the company lets landlords and real estate brokers prevent certain protected classes from seeing advertisements of housing for sale or rent—violating the Fair Housing Act.

“Amid growing public concern in the past weeks that Facebook has mishandled users’ data, our investigation shows that Facebook also allows and even encourages its paid advertisers to discriminate using its vast trove of personal data,” Lisa Rice, NFHA’s president and CEO, said in a statement.

The plaintiffs, which include three of NFHA’s member organizations, cite the results of their investigation into Facebook’s ad platform in the complaint. In New York, Washington D.C., Miami, and San Antonio, members of fair housing nonprofits sent in multiple ads to Facebook from a fictional realty company—specifically seeking to make these ads invisible to users of certain genders, ages, family types, disability status, and national origins.

A screenshot from NFHA’s investigation, showing how “African-American” and “Hispanic” demographics can be excluded in Facebook’s ad platform. (NFHA)

“Facebook’s platform is the virtual equivalent of posting a for-rent sign that says No Families with Young Kids or No Women, but it does so in an insidious and stealth manner so that people have no clue they have been excluded on the basis of family status or sex,’” said Fred Freiberg, executive director of the New York-based Fair Housing Justice Center, in a statement released by NFHA. In addition to damages, the complaint asks the court to block Facebook from continuing to let users post ads this way, and compel the company to vastly limit audience selection capabilities for its ads.

In 2016, nonprofit news organization ProPublica identified these violations by publishing the results of a similar investigation. At that time, Facebook vowed to do better; it updated its ad policy, and vowed to police discriminatory ads better. In 2017, ProPublica found that the promises hadn’t made much of a difference: Advertisers could still exclude users who, for example, identified themselves as African American or Hispanic, or listed their interests as wheelchair ramps or Judaism.

Another screenshot from the investigation, showing how landlords and real estate companies can exclude people with disabilities. (NFHA)

Facebook replied to the allegations with a statement: “There is absolutely no place for discrimination on Facebook. We believe this lawsuit is without merit, and we will defend ourselves vigorously.”

This year marks the 50th anniversary of the Fair Housing Act—a landmark civil rights legislation that sought to undo decades of state-sponsored segregation. But a key mandate of the law—the Affirmatively Furthering Fair Housing rule—has still not been put into effect. Meanwhile, housing discrimination persists. A recent investigation by the Center for Investigative Reporting’s Reveal initiative found that people of color were still much more likely to be denied home loans than their white counterparts. The difference is that now these practices are often harder to detect or, as in the case of Facebook, completely under the surface.

“It is already a challenge for women, families with children, people with disabilities and other under-served groups to find housing. Facebook’s platform that excludes these consumers from ever seeing certain ads to rent or buy housing must be changed immediately,” Rice said.

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