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Apartment Companies Targeted in Facebook Advertising Cases

Facebook Advertising

On September 18, Housing Rights Initiative (HRI) and a class of potential renters filed a lawsuit against seven national or regional property management firms, alleging age discrimination in advertising in violation of local fair housing laws in the Washington, D.C. metro area. This case is the first fair housing complaint against rental housing owners and operators, challenging their advertising practices on Facebook. The plaintiffs are seeking the following damages from the defendants:

  • A commitment to implement non-discrimination policies throughout all of their digital advertising;
  • Educating and training their staff on these policies;
  • Monitoring their own compliance; and
  • Compensating older residents who were denied information about renting apartments.

In light of these recent developments, NAA reminds its members to review their company advertising or marketing plans for all digital platforms. Facebook’s advertising platform allows businesses to choose their target audiences by selecting preferences from pre-populated lists of user interests and demographics. This feature may prevent paid advertisements from reaching audiences outside of those parameters.

Prior to this case, Facebook was the primary target of scrutiny. In March, Facebook agreed to make sweeping changes to its platform after being accused of enabling discrimination in housing, employment and lending advertising, as part of an agreement to settle a civil rights claim brought by the National Fair Housing Alliance, Communications Workers of America, several regional fair housing organizations and individual consumers and job seekers. However, these changes to Facebook’s platform only address compliance concerns with federal laws.

While HRI’s allegations are based on age protections in state or local fair housing laws (age is not a protected class under the Fair Housing Act (FHA)), previous claims against Facebook itself focused on alleged discrimination under the FHA. Of concern, Facebook’s pre-populated lists allowed advertisers to exclude audiences from their target list on the basis of interest categories that are proxies for federally protected classes (race, color, religion, national origin, sex, familial status and disability), such as: “Interest in Disabled Parking Permit,” interests in “Telemundo,” “English as a second language,” “parents with teenagers (13-18),” “soccer moms,” or “moms of preschool kids.”

Other challenges included potential disparate-impact liability in the use of zip codes to target advertising campaigns. A rental housing provider can be sued under disparate impact theory if the owner or operator implements a policy that is neutral on its face but nonetheless has an unintended, discriminatory effect on members of a protected class under the FHA.

The use of user interests, demographics and zip codes may have intended or unintended consequences on almost all of the federally protected classes under the FHA.

Despite the settlement, the U.S. Department of Housing and Urban Development (HUD) is moving forward with an investigation and formal charges against Facebook. HUD has alleged that Facebook violated the Fair Housing Act by encouraging, enabling, and causing housing discrimination through the company’s advertising platform. The agency further alleges unresolved fair housing issues regarding Facebook’s advertising practices, seeking to obtain appropriate relief for what they argue is ongoing harm. HUD is also investigating other tech giants, such as Twitter and Google, based on similar allegations.

At this time, NAA is working on guidance to help prepare members for fair housing enforcement and testing in this area. For questions, please contact Nicole Upano, Director of Public Policy or Scot Haislip, Vice President, Legal Affairs and Counsel on the NAA staff.