A purported class action filed last week in the U.S. District Court for the Northern District of California, accuses Facebook of discriminating against women and individuals over 40 who were denied advertisements and information about certain financial services opportunities, including those for bank accounts, insurance and investing.
According to the complaint, Facebook encourages financial services advertisers to target specific populations in order to reach the most “relevant” group and the “kinds of people” the businesses consider to be their “best customers.” The complaint further alleges that the general education and tools Facebook provides to advertisers encourages companies to restrict visibility of their ads based on age and gender, thereby “aiding and abetting” the companies to discriminate against certain groups.
The complaint seeks to certify a nationwide class of individuals and pursue a claim for millions of dollars in damages under California’s Unruh Civil Rights Act, which allows damages of $4,000 per violation. The named plaintiff is a 54-year-old woman living in Washington D.C. who alleges that Facebook and associated financial services companies prevented her and other similarly situated individuals from viewing advertising and information about financial services opportunities by targeting advertisements to men and those under 40.
The lawsuit comes seven months after Facebook agreed to change its targeting advertising system in order to settle lawsuits involving allegations that employers, landlords and lenders were allowed to discriminate through advertisements targeted to certain age, gender, regional and ethnic groups.
While it is highly debatable whether the Equal Credit Opportunity Act or other fair lending laws apply to social media advertising of this nature, regulators take the position that they do, and they sometimes explore these issues in examinations. For that reason, companies should be mindful of fair lending risk when formulating their social media and other advertising plans.
