Facebook sued over ads based on racial preference

A class-action lawsuit is accusing Facebook of breaking housing and job ad discrimination laws.

A Pro Publica investigation last week revealed that the social network lets marketers exclude users by "ethnic affinity." The lawsuit, first reported by Business Insider, alleges that such targeting tools are a breach of federal housing and civil right laws.

The law states that advertisements can't show obvious preference to specific groups of home or job-seekers.

Facebook has argued that its "ethnic affinity" tag doesn't count as an actual identity trait -- since it only judges whether or not people tend to favor a certain race. The company doesn't actually ask its users to state their race.

But civil rights lawyer contacted by the nonprofit investigative news group emphatically disagreed.

Pro Publica underscored its point by buying a housing ad that wouldn't be shown to users with African American, Hispanic, or Asian "ethnic affinities."

The racial preference falls under the "demographics" label on Facebook's ad dashboard, a designation the company has vowed to change.

"No user can tell whether they are subject to illegal discrimination, because the discrimination occurs with the ads they do not see," the lawsuit contends.

It also includes an image of the markers Facebook advertisers are allowed to exclude:

Original image has been replaced. Credit: Mashable

Facebook claims the feature is helpful for brands looking for more diverse customer bases. But a company blog post published shortly after the article alluded to the potential for abuse.

"It’s important to know that there’s also negative exclusion — for example, an apartment building that won’t rent to black people or an employer that only hires men," Christian Martinez, Facebook's head of multicultural wrote in the post.

"Our ad policies strictly prohibit this kind of advertising, and it’s against the law."

The lawsuit says its goal isn't to do away with exclusionary tools entirely, which it says can have legitimate uses too.

Update, Wednesday 12 pm, PST:

Facebook responded to the suit on Tuesday in a strongly worded statement:

"The lawsuit is utterly without merit and we will defend ourselves vigorously," a spokesperson said. "Multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising. Our policies prohibit using our targeting options to discriminate, and they require compliance with the law."