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The U.S. Department of Housing and Urban Development alleged "discriminatory" advertising practices in filing suit against Facebook.
The suit seeks damages over the ability on Facebook for employers and landlords to limit their audiences on the basis of race, ethnicity or gender.
Facebook last week settled a suit with the American Civil Liberties Union over the practice. It also overhauled its systems.
"While we were eager to find a solution, HUD insisted on access to sensitive information — like user data — without adequate safeguards," a Facebook spokesperson said. "We're disappointed by today's developments, but we'll continue working with civil rights experts on these issues."
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