By Akanksha Rana and Katie Paul

(Reuters) – The Trump administration accused Facebook Inc on Thursday of selling targeted advertising that discriminated on the basis of race in violation of the U.S. Fair Housing Act.

Seeking damages and unspecified relief for harm caused, the U.S. Department of Housing and Urban Development said https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_035 in its civil charge that Facebook also restricted who could see housing-related ads based on national origin, religion, familial status, sex and disability.

Facebook said it had been working with HUD to address the concerns and was surprised by the department’s decision to issue the charge, having taken “significant steps” to prevent ads that discriminate across its platforms.

The company also said HUD had “insisted on access to sensitive information – like user data – without adequate safeguards.” HUD claims Facebook mines data about its users and then uses machine learning to predict their responses to ads in ways that may recreate groupings defined by protected class.

The social media giant last week agreed to overhaul its paid advertising platform as part of a wide-ranging settlement with U.S. civil rights groups, which had filed five separate lawsuits accusing the company of enabling discrimination in advertising.

Under U.S. law, including the federal Fair Housing Act, it is illegal to publish certain types of ads – including online ads – if they indicate a preference based on race, religion, sex or other specified classifications.

As part of last week’s settlement, Facebook said it would create a new advertising portal for ads linked to housing and employment that would limit targeting options for advertisers. It also pledged to build a tool that would allow users to search all current housing ads listed in the United States, regardless of whether the ads were directed at them.

The HUD charge said Facebook enabled advertisers to exclude people whom the social network’s data classified as parents, non-American-born, non-Christian, or a variety of other interests that closely align with the Fair Housing Act’s protected classes.

“Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben Carson said. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

GROWING DISCONTENT

CNBC later reported that HUD was also looking into similar ad targeting practices at Twitter and Google, Facebook’s main competition for online advertising dollars.

HUD could not immediately be reached for comment.

Both companies vehemently denied allowing discriminatory advertising, but acknowledged that they allow advertisers to target by gender.

Researchers have told Reuters that gender targeting could potentially be a violation of the Fair Housing Act.

Discrimination against transgender individuals was prohibited, Google said.

“We’ve had policies in place for many years that prohibit targeting ads on the basis of sensitive categories,” Google said in a statement.

Advertising practices at Facebook, the world’s largest social network with 2.7 billion users and $56 billion in annual revenue, have been in the spotlight for two years amid growing discontent over its approach to privacy and user data.

News organization ProPublica reported as far back as 2016 that advertisers could target ads through Facebook based on people’s self-reported jobs, even if the job was “Jew hater.”

ProPublica later reported that it was able to buy discriminatory housing ads and slip them past Facebook’s review process, despite the company’s claims it was blocking such ads.

Since then, Facebook has faced legal pressure over the issue from the National Fair Housing Alliance, the American Civil Liberties Union and the Communications Workers of America, among other groups and individuals.

The ACLU welcomed HUD’s complaint, saying it would add “much-needed pressure” on the company on top of last week’s settlement. It encouraged the department to investigate other online ad targeting platforms.

“Although the settlement we reached with Facebook will result in removing many of the most troubling of Facebook’s advertising practices, there is more work to be done,” Galen Sherwin, an ACLU attorney, said in a statement.

The civil charge against Facebook follows an investigation by HUD in August when it filed a formal complaint https://www.hud.gov/press/press_releases_media_advisories/HUD_No_18_085 against Facebook for violating the Fair Housing Act by allowing landlords and home sellers to use its advertising platform to engage in housing discrimination.

The charge will be heard by a U.S. law administrative judge who can award damages for harm caused by the discrimination, along with fines and injunctive and other equitable relief.

(Reporting by Akanksha Rana in Bengaluru and Katie Paul in San Francisco; Additional reporting by Paresh Dave in San Francisco; Editing by Saumyadeb Chakrabarty, Bernard Orr and Dan Grebler)