By Bob Egelko
September 22, 2023
A Bay Area woman can sue Facebook for encouraging insurance companies to steer their ads away from women and older people on its platform of more than 2 billion users, a state appeals court ruled Friday.
If Samantha Liapes can prove her allegations, which cite Facebook’s declared policies, she could show that the Menlo Park-based tech giant violates state discrimination laws, said the First District Court of Appeal in San Francisco. It reinstated a suit that had been dismissed by a San Mateo County judge.
“Facebook, not the advertisers, classifies users based on their age and gender,” and “encourages advertisers to target users based on age and gender,” Justice Victor Rodriguez wrote in the 3-0 ruling.
“This is a watershed decision for online discrimination,” said attorney David Brody of the Lawyers’ Committee for Civil Rights. Under Law, which filed arguments in support of Liapes. “It is not acceptable to target and steer ads for important economic opportunities on the basis of protected characteristics like race or sex.”
"We’re thrilled that the court has recognized that discrimination is just as unlawful on the internet as it is anywhere else," said Linnet Davis-Stermitz, an attorney for Liapes.
Facebook and its lawyers did not immediately respond to requests for comment. The company is a subsidiary of Meta Platforms Inc., which also owns Instagram and WhatsApp.
In a separate case brought by the Washington state attorney general, Facebook agreed in a 2018 settlement not to exclude users from any advertising based on their race, religion, national origin, sexual orientation or disability. But the court said Monday that Facebook still classifies users by their age and gender and determines which users will receive categories of advertising, including ads from insurance companies.
Liapes, 48, filed suit in 2020, saying she was not receiving some ads for life and health insurance because of Facebook’s policies, which advise insurers to limit their distribution based on age and sex. Superior Court Judge V. Raymond Swope dismissed the suit, saying Facebook’s practices may have a disproportionate impact on women and older people but were neutral on their face, and complied with the law.
But the appeals court said Facebook, which receives more than 98% of its revenue from advertisers, makes the final decisions about which users will receive the ads, and “expressly uses age and gender” in those decisions.
Facebook’s “Blueprint” training program for advertisers “strongly encourages them to narrow the age range and genders of users who will receive ads to make them more effective,” Rodriguez wrote — for example, he said, the trainers note that ads for bridal shops could be sent only to women, and ads for shaving companies could be limited to men.
Prospective advertisers describe the types of customers they want to reach, and Facebook then decides where a company’s ads will be sent, the appeals court said.
In that decision, Facebook “relies heavily on age and gender to determine which users will actually receive the ad, regardless of whether the advertiser directs Facebook to limit its audience,” Rodriguez said.
He said an independent study based on more than 100,000 credit company ads on Facebook found that, regardless of the companies’ intentions, their ads were more likely to be sent to men than women.
In filings responding to the suit, Facebook said it has policies prohibiting advertisers from discriminating based on age, gender or other attributes protected by law. The court said the company could offer such evidence in later arguments or at a trial, but Liapes’ accusations are enough to allow her suit to proceed.