Facebook has agreed to overhaul its ad targeting system. This is to settle accusations that employers, landlords and end lenders use the platform to discriminate. This is a move in the right direction as the company is trying to clear its reputation after repeated allegations of selling personal data.
For a long time, the company has allowed advertisers to target potential customers based on their interests and demography. Following discrimination allegations, the social media giant is stepping away from the once lucrative approach. Apparently, they have abused the micro-targeting techniques.
A huge chunk of Facebook’s revenue has been from advertising. 99 per cent of the $55.8 billion made by the company last year was from advertising. This new move may not discourage advertisers from patronising the company. Although, it might affect some companies that use Facebook for recruitment and credit card promotions.
The settlement means Facebook will keep a wide range of demographic information like gender, age and Zip codes. These sorts of detailed information are often used by advertisers. They determine the race of potential customers for credit, job and housing opportunities.
Facebook recently faced scrutiny from the public and regulators over privacy. It is now facing investigation by the Federal Trade Commission, the Securities and Exchange Commission and several state attorneys general in the United States over the Cambridge Analytica data privacy controversy.
Facebook has faced condemnation over the years that its ads violated anti-discrimination laws. Advertisers could use the data from the social networking site to exclude African Americans, women, people with disabilities and others from its ads.
This announcement, made on Tuesday, 19th March 2019, will require a major overhaul of Facebook’s software. The changes should be completed by the end of the year. It will create a separate portal for advertisers to limit how much they can micro-target their audience.
Facebook Chief Operating Officer Sheryl Sandberg said in an interview, that she believes the
“settlement goes not just to the law but beyond the law in taking very, very strong action to make sure any discrimination doesn’t happen.”
This news may affect the entire tech industry. This is because Google, Twitter and Amazon offer similar demographic targeting tools. It might force these other tech giants to review their ad policies too.