Meta settles with DOJ over alleged discriminatory housing ads, stock swings to 26-month low

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The US Department of Justice announced on Tuesday that it has reached a settlement agreement with Meta Platforms Inc. META,
-3.97%,
formerly known as Facebook Inc., to resolve allegations of discriminatory advertising in violation of the Fair Housing Act (FHA). Shares of Meta reversed an earlier gain of up to 2.5% to trade down 3.6% toward the lowest close since April 3, 2020. The DOJ complaint alleged that the Meta algorithms that determine which users of Facebook received real estate ads discriminated against Facebook users on the basis of race, color, religion, gender, disability, family status and national origin. As part of the settlement, Meta will stop using Special Ad Audience, an advertising tool for real estate listings, by the end of 2022, and will develop a new system by December 2022 to address racial and other disparities caused through the use of personalization algorithms. Meta will also pay a civil penalty of $115,054, which is the maximum penalty under the FHA. “As part of this settlement, we will create a new machine learning method within our ad system that will change the way real estate ads are served to people residing in the United States in different demographic groups,” said Meta said in a statement to MarketWatch. “While HUD has raised concerns about personalized real estate ads in particular, we also plan to use this method for employment and credit-related ads in the U.S.” Meta stock fell 53, 1% since the start of the year, while the S&P 500 SPX
+2.79%
lost 21.0%.

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