Following the settlement of a discrimination case regarding the delivery of housing ads last year, Meta Platforms, Inc., formerly known as Facebook, Inc., is required to change its ad delivery system to prevent discriminatory advertising in violation of the Fair Housing Act (“FHA”).

 

Damian Williams, the U.S. attorney for the Southern District of New York, along with Kristen Clarke, assistant attorney general for the U.S. Justice Department’s civil rights division, announced that the department reached a key milestone in its settlement agreement with Meta Platforms, Inc. (“Meta”), formerly known as Facebook, Inc. (“Facebook”) on Jan. 9.

 

As required by the settlement, agreed on June 27, 2022, which resolved a lawsuit filed in the U.S. District Court for the Southern District of New York, Meta has since built a new system to address algorithmic discrimination, known as a Variance Reduction System.

 

According to The White House, algorithmic discrimination occurs when automated systems contribute to unjustified different treatment or impacts, disfavoring people based on their race, color, ethnicity, sex (including pregnancy, childbirth, and related medical conditions, gender identity, intersex status, and sexual orientation), religion, age, national origin, disability, veteran status, genetic information, or any other classification protected by law.

 

On Jan. 9, the parties to the settlement informed the court that they had reached agreement on Meta’s compliance targets [regarding algorithmic non-discrimination]. The development ensures Meta will be subject to court oversight and regular review of its compliance with the settlement through June 27, 2026.

 

Reacting to the news, Williams described the settlement as a groundbreaking resolution that sets a new standard for addressing “discrimination through machine learning.” He said, “We appreciate that Meta agreed to work with us toward a resolution of this matter and applaud Meta for taking the first steps towards addressing algorithmic bias.” He added, “We hope that other companies will follow Meta’s lead in addressing discrimination in their advertising platforms. We will continue to use all of the tools at our disposal to address violations of the Fair Housing Act.”

 

 

Clarke echoed Williams’ comments, saying the development marked a pivotal step in the Justice Department’s efforts to hold Meta accountable for unlawful algorithmic bias and discriminatory ad delivery on its platforms. “The Justice Department will continue to hold Meta accountable by ensuring the Variance Reduction System (VRS) addresses and eliminates discriminatory delivery of advertisements on its platforms,” she said. “Federal monitoring of Meta should send a strong signal to other tech companies that they too will be held accountable for failing to address algorithmic discrimination that runs afoul of our civil rights laws.”

 

The U.S. complaint alleged, among other things, that Meta used algorithms in determining which Meta users received ads, including housing ads, and that the algorithms relied, in part, on characteristics protected under the FHA. Specifically, the U.S. alleged that Meta fed troves of user information into its ad delivery system, including information related to users’ FHA-protected characteristics such as sex and race.

 

The U.S. further alleged that Meta used that information in its personalization algorithms to predict which ad was most relevant to which user.  According to the complaint, Meta’s delivery algorithms introduced bias in the delivery of its ads which varied along sex and estimated race/ethnicity between the set of users who were eligible to see housing ads based on the advertiser’s targeted audience and the set of users who actually saw the ad.

 

Pursuant to the settlement, Meta developed the VRS to reduce the variances between the eligible audience and the actual audience. The U.S. concluded that the new system will substantially reduce the variances between the eligible and actual audiences along sex and estimated race/ethnicity in the delivery of housing ads.

 

The VRS will operate on all housing advertisements across Meta platforms, and the agreement requires Meta to meet certain compliance metrics in stages. For example, by Dec. 31, 2023, for the vast majority of housing ads on Meta platforms, Meta will reduce variances to less than or equal to 10 percent for 91.7 percent of those ads for sex, and less than or equal to 10 percent for 81 percent of those ads for estimated race/ethnicity. For more information on the operation of the VRS, read Meta’s technical paper.

 

As further provided in the settlement agreement, the parties selected an independent, third-party reviewer, Guidehouse, Inc. (“Guidehouse”), to investigate and verify, on an ongoing basis, whether the VRS is meeting the compliance metrics agreed to by the parties. Under the agreement, Meta must provide Guidehouse and the U.S. with regular compliance reports, and must make available any information necessary to verify compliance with the agreed-upon metrics. The court will have ultimate authority to resolve any disputes over the information that Meta must provide.

 

Finally, as also required by the settlement agreement, Meta has ceased delivering housing advertisements using its “special ad audience” tool (which delivered ads to users who “look like” other users). Neither will Meta provide any targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics.

 

The settlement marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system. Individuals who believe they may have been victims of housing discrimination may submit a report to the U.S. Attorney’s Office for the Southern District of New York online at https://www.justice.gov/usao-sdny/civil-rights or by telephone at (212) 637-0840.

 

They may also submit a report online to the U.S. Department of Justice at www.civilrights.justice.gov or they may contact the U.S. Department of Housing and Urban Development (HUD) at 1-800-669-9777 or through its website at www.hud.gov.

 

More information about the U.S. Department of Justice’s civil rights division and the civil rights laws it enforces is available at www.justice.gov/crt. More information about the U.S. Attorney’s Office for the Southern District of New York is available at www.justice.gov/usao-sdny. The case is being handled by the office’s civil rights unit in the civil division. Assistant U.S. attorneys, Ellen Blain, David J. Kennedy, and Christine S. Poscablo, are in charge of the case.