Imagine if a report came out showing evidence that Wells Fargo violated the Fair Housing Act by

hiding certain home listings from African-Americans. Every politician in Washington would
condemn the bank for illegal practices. The Justice Department would be inundated with letters
demanding prosecution. Congressional committee chairs would schedule hearings to give
members an opportunity to yell at executives. Wells Fargo would put out a sober apology
expressing deep sorrow and vowing to make everything right. In other words, we have a context
for bank misconduct, and everyone dutifully plays their part.

Quotes in the article

Amazon.com Inc
AMZN

788.00
-1.82
-0.23%
Apple Inc
AAPL

111.87
-1.67
-1.47%
Wells Fargo & Co
WFC

46.00
-0.01
-0.02%
Bank of America Corporation
BAC

16.55
+0.05
+0.30%
When the same circumstance occurs with Facebook in the role of the villain, however, nobody
knows how to react. There are no assigned roles when a tech firm with a glimmering reputation
creates a controversy. We implicitly give them a break, regardless of the merits. Thats a bias we
should probably correct.
On Friday, ProPublica revealed that Facebook allows advertisers a tool that enables them to
exclude ethnic affinities like African-Americans or Hispanics from viewing their ads.
(Facebook does not ask users about their race, but collects data based on posts they like or
comment on.) This goes well beyond targeting different styles of advertising to certain groups,
which is common. Instead, it specifically prevents a black or Hispanic Facebook user from
seeing a particular ad.
Related: Facebook Is Making You Spend More Money Than You Should
This shifts from market segmenting to violating the law when the product is an ad for housing or
employment recruiting, especially because Facebook carries such granular data on its users. The
problem is the exclusion and how precise Facebooks big data allows that to work. Federal law
prevents discrimination in such matters by race or gender. ProPublica tested this with a sample
ad inviting people on Facebook to a forum at the Brooklyn Public Library about challenging
illegal rent increases. African-Americans, Asian-Americans and Hispanics werent allowed to see
it.
If the ad were selling a house or recruiting for a job fair, it would almost certainly be illegal.
This is about as blatant a violation of the federal Fair Housing Act as one can find, civil rights
lawyer John Relman told ProPublica.
Facebook, of course, disputes the allegation. It says the tools are meant to test marketing
campaigns with specific groups for their effectiveness, not to discriminate. In a buzzword-laden
post on its website, Facebook head of multicultural sales Christian Martinez writes, we want
Facebook to be a platform thats respectful and empowering, and that we will take aggressive
enforcement action against targeting that violates anti-discrimination laws.
But ProPublicas housing-based ad got approved for use on Facebook within 15 minutes,
suggesting that there isnt any close scrutiny of exclusion targeting, or understanding of its
negative consequences. At the least, Facebook hasnt thought critically about these issues.
While the ProPublica story has generated some chatter, no politician has demanded that
Facebook immediately take down its exclusion targeting tool. Nobody has called for hearings.
Nobody has sought clarification on whether the Justice Department would open an investigation.
Nobody has written a negative word about Facebook at all.

Banks have a pre-existing reputation that would turn a story like this into a serious negative pileon. Large tech firms dont have that baked into their reputation. Its reasonable to ask why,
considering that we have a smattering of examples of Silicon Valleys indifference to federal law,
from the industry-wide wage-fixing scandal to Amazons sweatshops.
Because tech is new and shiny, it gets the benefit of the doubt when negative stories get
published about industry practices in a way that Wall Street simply doesnt. And its not just
Facebook ads. Uber has over the years claimed to solve a market failure of African-Americans
having trouble hailing taxicabs. But a massive study from the National Bureau for Economic
Research showed that riders with African American-sounding names experienced higher
cancellation rates and longer wait times when using the Uber app. Airbnb has struggled with the
same biases.
Outside of a couple members of the Congressional Black Caucus contacting Airbnb, none of this
has raised much of a peep in Washington. In fact, former Attorney General Eric Holder rode to
Airbnbs rescue to help the company arrange an effective anti-discrimination policy. This kind of
assistance isnt present when Bank of America or some other bank disadvantages customers by
race.
Federal anti-discrimination laws are just one area where the tech industry has found itself in
trouble. ProPublica has another series on the tech industrys behind-the-scenes practices, finding
that Amazon favors its own products with its buy box, which often charges consumers more
for the same product. That skirts antitrust laws, which is something of a trend for tech. Google is
fighting multiple antitrust charges in Europe, where Apple has separately been accused of
illegally avoiding $14.6 billion in unpaid taxes. Facebook also has a tax issue over assets the
company moved to Ireland to take advantage of lower rates.
If we thought differently about Silicon Valley, we could build a profile of techs biggest
businesses as corporate miscreants, constantly seeking advantage by avoiding or outright
ignoring the law. But they dont have that reputation, and so these stories remain disassociated
rather than cumulative.
We hear a lot about the bias of journalists who report on stories, but not much about the bias of
those who read them. Reputational history creates blind spots in how readers process the news.
Its pretty obvious that Facebook values the profit it can gain from advertisers by giving them a
tool to segregate their ads well beyond the potential for illegal abuse. But we dont read that as
part of a consistent set of value judgments by Silicon Valley firms. Maybe we should.
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