A lawsuit filed in U.S. District Court for Northern District of California accuses Facebook of violating the Fair Housing Act and Civil Rights Act by allowing advertisers to discriminate by targeting ads to specific ethnicities.

Facebook allows ads to be targeted to specific audiences based on their "ethnic affinities." For example, advertisers on Facebook's ad-buy page can select to "exclude people who match at least one of the following," including African American, Asian, American, and Hispanics - however, excluding Whites or Caucasians is not an option.

Even if it were an option, the marketing effort would still be illegal for the housing and employment industries. Under the Fair Housing Act and Civil Rights Act, housing and employment ads are not allowed to discriminate by selectively choosing the type of demographic a home seller or employer would want in a specific community or job.

"The lawsuit is utterly without merit and we will defend ourselves vigorously. Multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising. Our policies prohibit using our targeting options to discriminate, and they require compliance with the law,” Facebook spokeswoman Genevieve Grdina said in a statement.

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