DOJ and Meta Reach Key Agreement in Deal to Combat Discriminatory Delivery of Housing Ads

On Monday, the Justice Department announced a compliance milestone in its settlement agreement with Meta Platforms Inc., that requires the social media powerhouse to change its advertisement delivery system to prevent discriminatory advertising in violation of the Fair Housing Act (FHA).

According to the DOJ, the compliance agreement marks the first time Meta has submitted to court oversight for its advertisement targeting and delivery system.

The June 2022 settlement resolved allegations that Meta employed unlawful algorithmic bias and discriminatory ad delivery on its platforms. Specifically, the DOJ argued that Meta used algorithms in predicting which advertisement was most relevant to which user, including housing advertisements, and that those algorithms relied in part on characteristics protected under the FHA such as race and sex.

In turn, Meta’s delivery algorithms allegedly introduced bias when delivering advertisements, resulting in a variance along sex, race, and ethnicity lines between the set of users who were eligible to see housing advertisements based on the advertiser’s targeted audience and the set of users who actually saw the advertisements.

Pursuant to the settlement, Meta developed a new system: the Variance Reduction System (VRS) to reduce the variances between eligible and actual audiences. According to the DOJ, the VRS will work and will help Meta comply with three 2023 deadlines reducing bias in housing advertisements.

The parties also selected an independent, third-party reviewer, Guidehouse Inc., to investigate and verify whether the VRS is meeting agreed-to compliance metrics.

Lastly, and as required by the settlement agreement, Meta has stopped delivering housing advertisements using the Special Ad Audience tool, which delivers advertisements to users who “look like” other users. In addition, Meta will not provide any targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics.

In the lawsuit, the government is represented by the United States Attorney for the Southern District of New York and Meta by Gibson, Dunn & Crutcher LLP