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- Facebook is trying to get back right with its largest user group African Americans, by settling a $5 million lawsuit over unfair advertising practices
- Facebook is trying to get back right with its largest user group African Americans, by settling a $5 million lawsuit over unfair advertising practices
Facebook is trying to get back right with its largest user group African Americans, by settling a $5 million lawsuit over unfair advertising practices . Protected groups who already face discrimination will no longer be excluded from viewing ads that can help them find jobs, a place to live, or even getting a loan. The real question is how will these changes impact Facebook’s aggressive advertising strategy and revenue?
The Breakdown You Need to Know
On the surface the monetary value of the settlement may not seem like much, considering Facebook made $16.8 billion in Q4 last year. It’s actually much deeper than money CultureBanx noted, because the social media giant is bringing a plethora of changes to how people can be targeted on the platform, based on the vast amounts of data it collects on more than 2 billion users. Prior to this settlement Facebook's targeting algorithm allowed advertisers to exclude protected groups such as racial minorities, women and older workers from seeing housing, employment and credit offers.
These changes all stem from litigation filed against Facebook last year from the National Fair Housing Alliance (NFHA), as well as the American Civil Liberties Union (ACLU), the Communication Workers of America (CWA) along with other private groups. While targeting in online ads to specific demographics is common practice, advocacy groups have warned that excluding users from viewing housing, employment and credit ads on the basis of race, gender, age and other protected categories violates federal and state civil rights laws.
There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads,” said COO, Sheryl Sandberg in a blog post. Now, the company won’t allow people who want to run housing, employment or credit ads to target by age, gender or zip code.
Revenues vs. Reality
It really all boils down to money and the social media platform makes most of it from advertising. During the final quarter of 2018 Facebook reported $16.6 billion, up 30% year over year. Nearly all of the company’s $56 billion in revenue last year was generated from advertising. So even with these changes, Facebook’s ad revenues will most likely not be impacted.
The company has continued to struggle with multiple public embarrassment issues. From a data privacy breach, to misappropriation of user data in the Cambridge Analytica scandal. When it comes to data breaches they are often more problematic for people of color, living on fixed or low incomes, or from other marginalized communities.
Facebook just can’t seem to really figure out issues around race and discrimination, primarily because the company isn’t very diverse. Black employees hold 3.5% of positions and Hispanics have less than 5%. This continued lack of diversity at the social media giant hinders it from identifying ways their product might harm certain customers.
Currently the social media giant has established a partnership with the groups who filed suit against them to prevent discrimination on all of its platforms, including Instagram and Messenger. They are going to meet with these groups twice a year for the next three years. Additionally, the company agreed to research the potential bias its computer algorithms have in ad targeting. Facebook is still facing an active investigation by the Department of Housing and Urban Development.
