The move comes after journalists and civil rights organizations exposed sales of discriminatory ads on Facebook.
The move comes after journalists and civil rights organizations exposed sales of discriminatory housing and employment ads. Sean Gallup / Getty Images

As part of a legal settlement with civil rights groups, Facebook announced today that it is revamping the way it sells advertising in order to prevent discrimination in digital ads for housing, credit, and employment.

Two years ago, ProPublica demonstrated how easy it was to buy Facebook ads discriminating against African-Americans and Jews. The investigative reporting website had earlier demonstrated that major American companies, including Uber, were buying employment ads on Facebook that discriminated on the basis of age and gender.

Civil rights groups sued and Washington State Attorney General Bob Ferguson launched an investigation that last year resulted in some changes to Facebook's advertising practices. But today's settlement goes further.

Under its terms, Facebook will create an entirely separate portal to be used by people purchasing housing, employment, and credit ads, and the company will significantly limit how those ads can be targeted.

Facebook's practice of collecting vast amounts of user data, and then profiting off that data by using it to help advertisers finely target consumers, has made the company tremendously wealthy. But now, after years of concerns, Facebook will rein its ad-selling model in these particular realms, in an attempt to prevent itself from selling types of ads that are strictly prohibited by federal law.

"Housing, job and credit advertisers will also now only be able to choose from a few hundred interest categories to target consumers, down from several thousand," ProPublica reports. "Critics have said such a swath of finely tuned categories, like people interested in wheelchair ramps, are essentially proxies to find and exclude certain groups."

Facebook will also pay around $5 million to the groups that sued it, including, The Washington Post reports, "a $2.5 million settlement with the National Fair Housing Alliance to train advertisers on how to comply with housing and lending laws, and advertising credits to promote fair housing."

It will also create an archive of "all current housing ads in the US" so that individuals and outside groups can monitor them.

"Today’s changes mark an important step in our broader effort to prevent discrimination and promote fairness and inclusion on Facebook," Chief Operating Officer Sheryl Sandberg said in a statement. "But our work is far from over."

Here in Washington State, Facebook has had trouble following a longstanding law that requires the company to know and disclose key details about a different type of advertising: local political ads.

Like the issue with housing, employment, and credit ads, the Washington State political ad issue has already resulted in a financial settlement.

But there has been no public conversation thus far about the creation of a separate portal for those buying political ads targeting Washington State elections.