Once again, the paid advertising platform of Facebook, Inc. (FB) has prompted an intense backlash. The ACLU, Outten & Golden LLP, and the Communications Workers of America recently filed charges against Facebook and 10 other companies, alleging that job advertisements posted by the companies unfairly and unlawfully discriminate on the basis of gender. Paid advertisements on Facebook have previously inspired discussion as to whether they allow discrimination based on protected categories including national origin, age, race, and gender.

Job Advertisements Allegedly Discriminated in Targeting Users

The suit alleges that Facebook selectively targets the destinations of its job advertisements in order to preference users by age and sex categories expressly chosen by employers. Beyond that, the charges allege that Facebook then earns revenue based on these choices, which typically exclude older workers and women from receiving the targeted ads. The suit does not allege that Facebook or any of the other companies named engage in unlawful or discriminatory hiring practices, only that the job ads are targeted in this way. The suit alleges that Facebook "has engaged in a pattern, practice, or policy of targeting and sending job advertisements and related recruitment and hiring opportunities to male Facebook users as prospective job applicants, while excluding female and other non-male prospective job applicants from receiving the job advertisements and opportunities."

Further, the suit adds that "a focus of this charge is the first step of the process [of placing an ad on Facebook] in which the advertiser selects the population of Facebook users who will be eligible to receive the ad."

Berkshire-Owned Company Among Those Named

Besides Facebook, the suit alleges that several other companies have engaged in unlawful job advertisement targeting. Nebraska Furniture Mart, a retailer of home furniture, is notable because it is owned by Berkshire Hathaway (BRK.A), the major conglomerate run by Warren Buffett. Besides Nebraska Furniture Mart, other companies named in the charges include software developer Abas USA, home security company Defenders, the Police Department of the City of Greensboro, North Carolina, employment agency Need Work Today, window company Renewal by Andersen LLC, tire retailer and auto repair company Rice Tire, moving company JK Moving Services, roofing and remodeling outfit Enhanced Roofing & Modeling and athletics equipment maker Xenith.

Advertisements are a critical source of revenue for Facebook. In 2017, the company generated roughly $40 billion in revenue. Of that total, about $39.9 billion was attributed to the sale of digital advertisements which are then distributed among users.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.