Meta’s new ad system addresses allegations that it enabled housing discrimination

Meta’s launching a new ad distribution system in the US as part of the settlement it reached with the US Department of Justice (DOJ) last year. In an announcement on its site, Meta says its new Variance Reduction System (VRS) will create a more “equitable distribution of ads” on the company’s platforms, addressing claims that the platform propagated housing discrimination by letting advertisers exclude protected groups from their marketing campaigns.

Things came to a head when the Department of Housing and Urban Development (HUD) filed a lawsuit against the company in 2019. Last year, the DOJ, which represents the HUD, reached a settlement with Meta that requires the company to develop a new system to “address racial and other disparities caused by its use of personalization algorithms in its ad delivery system.”

In this most recent announcement, Meta explains that its updated system uses “new machine learning technology” when serving ads, ensuring that an ad’s actual audience more accurately reflects the “eligible” target audience.

Once the ad’s been seen by enough people, Meta says the VRS will measure the aggregate age, gender, and estimated race or ethnicity distribution of the group. It will then compare this information with the population of “people who are more broadly eligible to see the ad,” and if there’s too much of a difference in distribution, the system will automatically adjust the pacing of ads to “reduce variance between the audiences.”

The DOJ responded to the change in a press release, noting that Meta will be subject to court oversight until June 27th, 2026. As part of the agreement, a third-party reviewer will evaluate whether Meta’s new VRS meets the terms reached in the settlement. Meta must also meet certain milestones within a specific period of time: by December 31st, 2023, Meta will need to reduce variances to “less than or equal to 10% for 91.7% of those ads for sex and less than or equal to 10% for 81.0% of those ads for estimated race/ethnicity.”

“This groundbreaking resolution sets a new standard for addressing discrimination through machine learning,” US attorney Damian Williams says in a statement. “We appreciate that Meta agreed to work with us toward a resolution of this matter and applaud Meta for taking the first steps towards addressing algorithmic bias.”

According to Meta, the VRS won’t have access to users’ age, gender, or race and will measure estimated race or ethnicity using something a tool called the Bayesian Improved Surname Geocoding. While Meta has already started rolling out the system for housing ads, the company says it will eventually expand it to US employment and credit ads. You can read more about the VRS in this white paper.