Facebook can’t dodge ad discrimination suit, Ninth Circuit rules

SAN FRANCISCO (CN) — The Ninth Circuit rejected on Friday the dismissal of a federal case claiming Facebook excluded certain groups — like women of color and single parents — when searching for housing on the social media platform’s Marketplace function.

The federal appeals court decided Friday in a 2-to-1 ruling to reinstate a discrimination class action dismissed in the Northern District of California in 2021.

Rosemarie Vargas, Jazmine Spencer, Kisha Skipper, Deillo Richards and Jenny Lin filed a class action against the social media giant in 2019, claiming that Facebook’s targeted advertising algorithm discriminates against women of color, single parents, disabled individuals and other protected groups by not showing ads for housing that were otherwise shown to Facebook users not in a protected class.

Facebook uses an ad platform that can be used to target ads to different types of people. Categories like number of children and location are used. Facebook users supply some of that information and Facebook uses an algorithm to garner other pieces.

The panel cited a scenario described by Vargas in the complaint as an example in their ruling. Vargas — known by Facebook as disabled single mother of Hispanic descent — and a Caucasian friend used the same search criteria when searching for housing on Facebook Marketplace. The friend was shown more ads in more favorable locations that Vargas didn’t get in her search.

The class action was dismissed in 2021 by U.S. District Judge William Orrick, who indicated in his ruling that plaintiffs should have identified the specific ads she didn’t see and noted that Facebook used only paid ads in its targeting methods.

U.S. Circuit Judges Michael Murphy and Susan Graber, both Bill Clinton appointees, said in their concurring opinion, “the district court faulted the complaint for not identifying specific ads that Plaintiff Vargas did not see. But Plaintiffs’ very claim is that Facebook’s practices concealed information from housing-seekers in protected classes. And nothing in the case law requires that a plaintiff identify specific ads that she could not see when she alleges that an ad-delivery algorithm restricted her access to housing ads in the first place.”

Murphy and Graber also also said it is likely that one or more ads she didn’t see were paid advertisements.

“If Plaintiff Vargas cannot prove that she was denied access to one or more paid ads, then her claims will fail on the merits—but they do not fail for lack of standing,” they wrote. “Plaintiff Vargas alleges a concrete and particularized injury—deprivation of truthful information and housing opportunities—whether or not she can establish all the elements of her claims later in the litigation.”

According to the concurring judges, Facebook wanted the panel to determine that the tools used by advertisers are “neutral” because all advertisers can use them, not just those connected to housing. But, according to the group’s initial suit, Facebook specifically promotes its advertising tools to housing advertisers.

“A patently discriminatory tool offered specifically and knowingly to housing advertisers does not become ‘neutral’ within the meaning of this doctrine simply because the tool is also offered to others,” the judges ruled.

U.S. Circuit Judge John Owens, a Barack Obama appointee, said in his dissenting opinion that the plaintiffs did not claim an advertiser used Facebook’s ad platform to exclude their protected class.

Owens in his dissent says that the plaintiffs need to claim that a housing ad didn’t appear for them because an advertiser used Facebook’s ad platform to exclude their protected class. They didn’t identify any ad or advertiser. Also, they made no claim that housing discrimination is the reason they couldn’t find housing ads meeting their criteria.

According to Owens, the complaint failed to identify any specific exclusionary ad or advertiser, "nor does it allege facts supporting an inference that housing discrimination (even if the identities of the ads and advertisers are unknown) is plausibly the reason Plaintiffs failed to find housing ads meeting their respective search criteria. Plaintiffs have alleged nothing to exclude the possibility that suitable housing was not available or not advertised on Facebook,” he wrote.

Owens also focuses on the distinction between user-generated and paid ads, which he noted are distinctly labeled as "sponsored" on the website.

“Only paid ads are relevant to Vargas’s housing discrimination claims,” he says.

Attorneys for the group that sued and for Facebook did not respond to requests for comment by press time.

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