Facebook can be sued over claims its advertising algorithm is biased, a California State Court of Appeals has ruled.

The decision reverses a previous ruling from 2020 that stated Facebook was protected from accountability under Section 230 – a law that shields online platforms from legal action when users share illegal material.

Why we care. Brands utilizing Facebook’s ad tools may unintentionally be engaging in discriminatory practices if the platform’s algorithm is found to be biased.

Biased ad algorithm? Facebook was originally taken to court in 2020 for violating civil rights laws. The social platform was accused of not showing insurance ads to women and older people after 48-year-old Samantha Liapes tried to use Facebook to find an insurance provider. Liapes claimed she wasn’t shown insurance ads due to her age and gender.

2020 outcome. The case was originally dismissed by the court after it found Facebook’s tools “neutral on their face and concluding that Facebook was immune under the Communications Decency Act, 47 U.S.C. 230.” However, Liapes appealed the decision.

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Appeal. The decision was reversed on 21 September 2023 after the appeals court found that the case “adequately” alleges that Facebook “knew insurance advertisers intentionally targeted its ads based on users’ age and gender” – which is in violation of the Civil Rights Act.

The court concluded: “Facebook does not merely proliferate and disseminate content as a publisher … it creates, shapes, or develops content” with the tools.

Deep dive. Read the Liapes v. Facebook, Inc. case in full for more information.