Facebook Announces Potential $5 Billion FTC Fine
New Indictment a Reminder of CPSC’s Enforcement Capabilities

HUD Brings Housing Discrimination Charge Against Facebook

By Emily A. Bruemmer

HousingOn March 28, 2019, the US Department of Housing and Urban Development (HUD) filed a Charge of Discrimination against Facebook, alleging that Facebook violated the Fair Housing Act “by encouraging, enabling, and causing housing discrimination through the company’s advertising platform.”  This is an administrative action filed by the Secretary of HUD, on behalf of complainant Assistant Secretary for Fair Housing and Equal Opportunity, before the Office of Administrative Law Judges at HUD.  Unless any of the parties chooses to have the case heard in federal district court, an administrative law judge will hear the charge and may award damages, in addition to injunctive or other equitable relief, attorney fees, and fines.  HUD previously announced a formal complaint, initiated by the Secretary of HUD, against Facebook in August 2018.  The formal complaint was the first step in a process that then moved to a fact-finding investigation.  Last month’s charge indicates that the investigation resulted in a determination that there was reasonable cause to believe that Facebook violated the Fair Housing Act.

The Fair Housing Act prohibits making, printing, or publishing (or causing to be made, printed, or published) notices, statements, or advertisements related to the sale or rental of a dwelling that indicate “any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familiar status, or national origin, or an intention to make any such preference, limitation, or discrimination.”  Here, HUD has alleged that Facebook violated that prohibition by allowing advertisers not only on its social media platforms but also across the Internet through its advertising services to select or exclude categories of recipients of housing-related advertising by making distinctions based on race, color, religion, sex, familial status, national origin, disability, and/or zip codes.  According to the charge, advertisers could use a map tool to exclude people who lived in specific areas by drawing red lines, evoking historical discrimination through “redlining.”

This enforcement action came just ten days after Facebook settled five lawsuits related to allegedly discriminatory advertising practices, including one by fair housing groups the National Fair Housing Alliance, Fair Housing Council of Greater San Antonio, Fair Housing Justice Center of New York, and Housing Opportunities Project for Excellence, Inc. of Miami related to Facebook’s housing advertisement practices, and one by the ACLU, the Communications Workers of America, and Outten & Golden LLP related to sex discrimination in employment advertisements.

As HUD General Counsel Paul Compton stated in the press release: “Fashioning appropriate remedies and the rules of the road for today’s technology as it impacts housing are a priority for HUD.”  Further, that HUD’s lawsuit follows Facebook’s settlements with private parties provides a reminder that settling lawsuits with private plaintiffs is no guarantee that a federal or state regulator will not bring its own, separate enforcement action.  The case will be an important one to watch.