Facebook Responsible For Illegal Ads, Think Tank Says

Two years ago, a blockbuster report from ProPublica revealed that Facebook's ad-targeting tool enabled advertisers to prevent housing ads from being shown to belong to certain “ethnic affinity” groups -- including people Facebook has identified as having an ethnic affinity of black, Asian-American and Hispanic.

Facebook has since implemented some changes to its targeting tools, but hasn't been able to shake the fallout from that report -- including several pending lawsuits that accuse the company of violating civil rights laws by facilitating ads that discriminate.

The company is arguing that the lawsuits should be dismissed on the grounds that it was merely an intermediary that offered neutral tools to advertisers. If anyone violated civil rights laws, it was the advertisers, not Facebook, the company says.

Facebook has pointed judges to Section 230 of the Communications Decency Act, which broadly immunizes Web services providers from liability for material posted by users -- including illegal ads. But that law has some exceptions -- including one for content "developed" by the providers. The scope of that exception is unclear.

Facebook's critics, including the Department of Justice, say Facebook crossed the line from intermediary to developer, because it facilitated the demographic targeting that effectively blocked ads from minorities.

Now, the tech consultancy Upturn is siding against Facebook on the matter. That organization argues that Facebook's ad-targeting platform -- which essentially allows advertisers to pick and choose which demographic groups will be shown ads -- may subject the company to liability.

“Facebook itself decides which users within a target audience will (and will not) see a particular ad,” Upturn writes in a friend-of-the-court brief submitted Friday to U.S. District Court Judge Edward Davila in the Northern District of California. “Here, what truly matters is Facebook’s conduct -- its steering of housing ads away from protected groups -- not the legality of the underlying ad content.”

For now, the law appears unsettled. But if courts decide that DOJ and Upturn have the better argument, other companies that offer demographic targeting tools could also find themselves facing litigation over questionable ads.

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