In big blow, Facebook set to get sued over biased ad algorithms

Facebook isn’t protected and could face a lawsuit over biased ad algorithms for targeting ads based on gender and age, the court said.

Facebook could be sued over its discriminatory ad algorithms, the court ruled. (REUTERS)

The threat of a lawsuit is looming over Facebook as it faces allegations of biased advertisement algorithms. The Meta-owned social media platform in August agreed to the European Union's Digital Services Act (DSA) including restrictions on targeting ads at minors as well as ads based on gender or race. However, Facebook has come under scrutiny over a class action lawsuit filed against it in 2020, which alleges that the platform's ad algorithms discriminated against older people, not showing ads for insurance. While it was initially declared that the social media platform was safe from any lawsuits, it isn't the case anymore, according to the court. Here's what you need to know.

Threat of a lawsuit

As per a report by The Verge, the case involves 48-year-old Samantha Liapes who tried to find an insurance provider via Facebook. However, the social media network's algorithms did not show her the relevant ads due to her gender as well as her age, the lawsuit claims. A previous ruling stated that Facebook was protected from lawsuits on the basis of Section 230 of the United States Code which protects publishers from lawsuits if the content is provided by another content provider.

However, California's First District Court of Appeal overruled the previous decision, stating that Facebook can be sued in violation of California's civil rights laws. As per a release by the American Civil Liberties Union (ACLU), in the case of Samantha Liapes et al., v. Facebook, Inc., it has been made clear that Facebook is not immune from lawsuits and the allegations were sufficient for a lawsuit.

David Brody, managing attorney for the Digital Justice Initiative said in the release, “It is not acceptable to target and steer ads for important economic opportunities on the basis of protected characteristics like race or sex. This decision makes clear that algorithms and business models built on discrimination must change.”

Previous allegations

This is not the first time that Facebook has been heavily scrutinized for its ads. In 2018, the US federal government filed charges against the social media platform, claiming that it allowed ads that discriminate against protected groups, violating the Fair Housing Act. The company in 2022 settled with the US Department of Justice (DOJ), promising to bring a new system for ads. The new system, called Variance Reduction System (VRS), was introduced in January this year to create an “equitable distribution of ads”.

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