Facebook Discriminatory Ad Accord Seen as Far From Final Fix

(Bloomberg) -- Facebook Inc. can no longer block minorities or other groups from seeing advertisements, according to an agreement with Washington state.

Facebook signed a binding agreement to modify its advertising platform so that third parties can’t discriminate based on ethnicity, religion or sexual orientation, according to Washington Attorney General Bob Ferguson. Facebook must make the changes nationwide within 90 days, according to a statement Tuesday from Ferguson’s office.

The owner of the world’s largest social network faces multiple legal actions over its advertising practices, and the accord doesn’t resolve those cases.

"There’s a long way to go to make the platform non-discriminatory," said Peter Romer-Friedman, a lawyer in one of the lawsuits. "This agreement does nothing to stop other discriminatory features of Facebook’s ad platform, including the lookalike audience tool where Facebook identifies users who are demographically similar to an existing audience that an advertiser wants to reach.”

Washington state started probing Facebook’s advertising practices after ProPublica published an article alleging advertisers could exclude users by race. The agreement concludes the 20-month investigation, according to Ferguson’s statement.

Facebook vice president of state and local policy Will Castleberry said the company worked closely with Ferguson’s office to reach the agreement. “Discriminatory advertising has no place on our platform, and we’ll continue to improve our ad products so they’re relevant, effective, and safe for everyone,” he said in an emailed statement.

The agreement comes after an effort by Facebook in 2017 to prevent discriminatory advertising failed, Ferguson said. More recently, in April, Facebook announced that it hired staff to review ads to enforce existing prohibitions on discrimination.

In March, Facebook was sued in Manhattan federal court by civil rights groups led by the National Fair Housing Alliance. They claimed the social-media giant’s advertising platform allows landlords and real-estate brokers to exclude groups of people based on characteristics such as family status or sex from receiving ads about housing.

Washington state made those and other claims in its case. Ferguson said state investigators created 20 fake ads on Facebook that excluded ethnic minorities from receiving advertising for nightclubs, restaurants, lending, insurance, employment and apartment rentals.

"This meant that these ethnic groups would not be able to see the ads at all, and would therefore be unaware of the opportunities," according to the statement.

The Communications Workers of America claims in a pending class-action suit that hundreds of employers and employment agencies used Facebook tools to filter out older job hunters when seeking to fill positions. The union sued Amazon, T-Mobile and Cox Communications, but not Facebook in that case.

Romer-Friedman said the Washington agreement won’t stop “digital redlining of people of color” by advertisers targeting ads to exclude zip codes that are predominately African-American or Latino. He also said the accord won’t prevent age discrimination, which he called “the most routine, frequent type of discrimination on Facebook’s platform.”

Facebook has said targeting employment ads by age is sometimes necessary, especially for employers that have age restrictions or want to give opportunities to a certain demographic, like retirees.

The case is In re: Facebook Inc., 18-2-18287-5 SEA, King County Superior Court, Washington (Seattle).

--With assistance from Chris Dolmetsch and Josh Eidelson.

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg, Joe Schneider

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