By Stephen Engelberg, ProPublica

The federal agency that enforces the nation’s fair housing laws said it is “in discussions” with Facebook to address what it termed “serious concerns” about the social network’s advertising practices.

Heather Fluit, a spokeswoman for the Department of Housing and Urban Development, said in a statement that the department was “aware of published reports that Facebook’s advertising tool may allow users to discriminate in housing advertisements.”

Fluitt said Facebook’s advertising policies will be examined by HUD’s office of Fair Housing and Equal Opportunity.

ProPublica disclosed last week that Facebook’s software allows advertisers to exclude people from seeing their ads whose habits on the social network suggest an affinity with ethnic groups like African-Americans, Hispanics or Asian-Americans.

Responding to the story, Facebook said its policies bar advertisers from using the targeting options for discrimination, harassment, disparagement or predatory advertising practices.

“We take a strong stand against advertisers misusing our platform: Our policies prohibit using our targeting options to discriminate, and they require compliance with the law,” said Steve Satterfield, privacy and public policy manager at Facebook. “We take prompt enforcement action when we determine that ads violate our policies."

Just last week, a group of Facebook users filed a class-action lawsuit (pdf) against Facebook, asserting that this ad-targeting technology violates the Fair Housing Act and the Civil Rights Act of 1964. “There is no mechanism to prevent ad buyers from purchasing ads related to employment/housing and then excluding based on these illegal characteristics,” the plaintiffs wrote, in a complaint filed on Thursday in the U.S. District Court for the Northern District of California. “[N]o user can tell whether they are subject to illegal discrimination, because the discrimination occurs with the ads they do not see. As a result, the problem will not be remedied unless Facebook is forced to take additional action.”

The complaint cited ProPublica’s story and included ProPublica’s screenshot of the Facebook ad platform’s audience-narrowing options.

When asked about the class-action suit, Facebook reiterated that its policies prohibit advertisers from discriminating against its users. "The lawsuit is utterly without merit and we will defend ourselves vigorously,” Facebook’s statement read. “Multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising.” Facebook declined to answer ProPublica’s questions about HUD’s concerns.

The Fair Housing Act of 1968 makes it illegal "to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.” Violators can face tens of thousands of dollars in fines.

The Civil Rights Act of 1964 also prohibits the “printing or publication of notices or advertisements indicating prohibited preference, limitation, specification or discrimination” in employment recruitment.

To Learn More:

Suzanne-Juliette Mobley, et al., v. Facebook, et al. (U.S. District Court, Northern District of California) (pdf)

HUD Has ‘Serious Concerns’ About Facebook’s Ethnic Targeting (by Stephen Engelberg, ProPublica)

Facebook Lets Advertisers Exclude Users by Race (by Julia Angwin and Terry Parris Jr., ProPublica)