Meta settles with DOJ on alleged discriminatory housing ads, stock swings lower toward 26-month low

The U.S. Department of Justice announced Tuesday that it has obtained a settlement agreement with Meta Platforms Inc. , formerly known as Facebook Inc., to resolve allegations of discriminatory advertising in violation of the Fair Housing Act (FHA). Shares of Meta reversed an earlier gain of as much as 2.5% to trade down 3.6% toward the lowest close since April 3, 2020. The DOJ complaint had alleged that Meta algorithms that determined which Facebook users received housing ads discriminated against Facebook users based on race, color, religion, sex, disability, familial status and national origin. As part of the settlement, Meta will stop using Special Ad Audience, an advertising tool for housing ads, by the end of 2022, and will develop by December 2022 a new system to address racial and other disparities caused by the use of personalization algorithms. Meta will also pay a civil penalty of $115,054, which is the maximum penalty under the FHA. “As part of this settlement, we will be building a novel machine learning method within our ads system that will change the way housing ads are delivered to people residing in the U.S. across different demographic groups,” Meta said in a statement to MarketWatch. “While HUD raised concerns about personalized housing ads specifically, we also plan to use this method for ads related to employment and credit in the U.S.” Meta’s stock has plunged 53.1% year to date, while the S&P 500 has shed 21.0%.

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