Facebook Prevails In Battle Over Housing Ads

Facebook has defeated claims that its prior ad-targeting options violated discrimination laws by allowing advertisers to block housing ads from users based on factors such as race, sex or age.

In an opinion issued late last week, U.S. District Court Judge William Orrick in the Northern District of California said the Facebook users who sued couldn't proceed in federal court, because they failed to show how they were affected by Facebook's former ad-targeting options.

He added that Facebook was also protected by Section 230 of the Communications Decency Act, which immunizes web platforms from liability over material posted by users.

The ruling brings an end to a lawsuit dating to October of 2019, when New York residents led by Rosemarie Vargas alleged in a class-action complaint that Facebook's ad-targeting platform violated discrimination laws.

The case was one of several similar lawsuits against Facebook over allegedly discriminatory ads.

All of those lawsuits largely stemmed from a 2016 ProPublica report stating that Facebook lets advertisers prevent their ads from being shown to users who belong to certain "ethnic affinity" groups -- including people Facebook has identified as having an ethnic affinity of black, Asian-American and Hispanic.

By the time Vargas and the others sued, Facebook had already agreed to revise its targeting options to prohibit advertisers of housing, employment or credit offers from targeting ads based on age, gender, ZIP code and ethnic affinity.

Orrick said in his dismissal ruling that the complaint by Vargas and the others lacked the kind of detailed allegations that, if true, would show they had been harmed by Facebook's former ad-targeting system.

He described their claim as “the sort of generalized grievance” that doesn't give people the right to sue in federal court.

“In sum, what the plaintiffs have alleged is that they each used Facebook to search for housing based on identified criteria and that no results were returned that met their criteria,” Orrick wrote. “They assume (but plead no facts to support) that no results were returned because unidentified advertisers theoretically used Facebook’s targeting ad tools to exclude them.”

He added that Facebook was also protected by Section 230 for any illegal ads posted by outside parties, noting that the company's former ad-targeting tools were neutral.

“Use of the tools was neither mandated nor inherently discriminatory given the design of the tools for use by a wide variety of advertisers,” he wrote.

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