Court opens the way for Facebook to be sued over discriminatory advertising algorithm

A class action lawsuit filed in 2020 against Facebook for not showing insurance ads to women and seniors has three years later led to a possible new and broader legal front for the company. A California appeals court has ruled that the platform can be sued for possible discriminatory bias in its advertising algorithm, overturning an earlier ruling.

The ruling presents this targeting as a violation of the Civil Rights Act and considers it outside the scope of Section 230, the brief regulatory framework that protects online platforms from legal liability if users post content contrary to the law. The court explains that Facebook “knew that insurance advertisers intentionally targeted their ads based on the age and gender of users”, which resulted in the original plaintiff Samantha Lliapes not being able to see such campaigns because she was 48 years old and female.

It further notes that the Blueprint programme to train advertisers in the use of Facebook’s advertising tools “strongly encourages advertisers to narrow the age range and gender of users who will receive ads to make them more effective”. Such targeting would not always occur at the company’s request, according to the court, which relied on a previous study of more than 100,000 credit company ads that concluded they were more likely to be shown to men than women.

It further notes that the Blueprint programme to train advertisers in the use of Facebook’s advertising tools “strongly encourages advertisers to narrow the age range and gender of users who will receive ads to make them more effective”. Such targeting would not always occur at the company’s request, according to the court, which relied on a previous study of more than 100,000 credit company ads that concluded they were more likely to be shown to men than women without it being clear that this was the intent.

For its part, Meta has indicated that it has internal regulations that prohibit advertisers from discriminating on the basis of age, gender and other attributes protected by law. But the court has recommended that the company offer them at a possible later trial, because it believes that the allegations made by Liapes are sufficient to validate its claim.

This decision once again puts Facebook’s advertising system, whose compliance with the law was also called into question by a federal lawsuit filed in 2018 that accused the company of allowing housing discrimination, in a new system that in principle avoids such a situation. That case was closed last year with a settlement with the US government through the launch of a new system that in principle avoids such a situation. Also in 2018, Facebook had agreed with the Washington state attorney general not to exclude users from exposure to ads because of their race, religion, national origin, sexual orientation or disability.