Facebook (FB) is facing another housing discrimination lawsuit. A group of Facebook users have sued the company to seek compensation for alleged discriminatory housing ads, Mercury News reports. The plaintiffs claim that Facebook allowed landlords to block them from viewing housing ads, according to the report.
Facebook has built tools that allow advertisers to target their campaigns to specific audiences based on a range of factors. Such targeting allows marketers to get their messages to the right audience and maximize the impact of their campaigns. Marketers can target their messages to Facebook audiences based on gender, residence, family status, and a range of other factors.
However, some marketers have abused Facebook’s ad targeting tools, putting the company in hot water. In March this year, for instance, the US government sued Facebook through its housing department for housing discrimination. The government charged that Facebook had discriminated against some people by shielding them from housing ads on its platform.
In the same month, Facebook agreed to pay about $5.0 billion to settle several ad discrimination lawsuits. The lawsuits were filed by civil rights groups that accused Facebook of serving discriminatory housing, job, and credit ads. Facebook says it doesn’t tolerate discrimination on its platform. In addition to paying money to settle with these groups, it’s also promised to curb the abuse of its ad targeting tools. For example, Facebook won’t allow marketers to shield certain people from viewing housing, job, and credit opportunities.
Advertising is Facebook’s bread and butter
Facebook reaches over 6.0 billion people around the world across its family of social apps. As a result, Facebook has become an important digital advertising provider. Facebook derives most of its revenue from advertising. In the second quarter, for instance, advertising generated $16.6 billion of Facebook’s revenue, a rise of 28% year-over-year. Advertising sales contributed 99% of Facebook’s total revenue in the quarter.
Google (GOOGL), Twitter (TWTR), Baidu (BIDU), and Yandex (YNDX) also derive most of their revenue from advertising. However, they are as dependent on advertising as Facebook. For example, advertising contributed 84% of total revenue at Alphabet in the second quarter. Advertising contributed 86% of total revenue at Twitter in the quarter. Baidu and Yandex derived 73% and 70% of their second-quarter revenues from advertising, respectively.
Because advertising is Facebook’s bread and butter, we believe the company is trying to keep this business out of trouble. That may explain why Facebook has deemed it wise to settle with the civil rights groups that have faulted its ad targeting practices.