The Justice Department has reached a settlement agreement with Meta after suing the social media giant for targeted advertising practices that allegedly violated the Fair Housing Act. As part of the settlement agreement, Meta will change its ad delivery system for housing ads and stop using its "Special Ad Audience" tool.
The Justice Department touted the "historic" settlement, which resolves the department's first case challenging algorithmic bias under the Fair Housing Act. The settlement also marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system.
The case began in 2019, when the Department of Housing and Urban Development (HUD) sued Facebook for allowing landlords and property owners to restrict who saw certain ads for housing based on race, religion and nationality. HUD referred the case to the DOJ after Meta elected to have the charge heard in federal court.
Meta's "Special Ad Audience" tool, according to the DOJ complaint, relies on a discriminatory algorithm. Meta said Tuesday that it's sunsetting the tool for employment and credit ads, in addition to housing ads.
To replace the tool, Meta said it will adopt a new system designed to make sure the audience that ends up seeing a housing ad more closely reflects the eligible targeted audience for that ad. It will focus on a few key demographics: age, gender and estimated race or ethnicity.
The new system, the company said, "reflects more than a year of collaboration with HUD."
According to the terms of the settlement, Meta doesn't have to stop using the Special Ad Audience tool until the end of this year.
"This type of work is unprecedented in the advertising industry and represents a significant technological advancement for how machine learning is used to deliver personalized ads," Roy L. Austin Jr, Meta's VP of Civil Rights and Deputy General Counsel, said in a blog post. "We are excited to pioneer this effort, but given the complexity and technical challenges involved, it will take some time to test and implement."
Under the terms of the settlement, Meta also has to pay a civil penalty of $115,054, the maximum penalty available under the Fair Housing Act (and a drop in the bucket for Meta, which reported revenues of $27.9 billion in its last earnings report).
The Justice Department and Meta will select an independent, third-party reviewer to regularly verify that Meta's new system is meeting the compliance standards agreed to by the parties.