Cuomo Call to Investigate Advertisers Use of Facebook Platform Points in Right Directions

Reasoning that Facebook’s advertising platform enables its advertisers to use personal data such as race, color, religion and a host of other characteristics to discriminate, New York Governor Andrew M. Cuomo called on the Department of Financial Services to investigate reports that state-regulated advertisers are using Facebook, Inc.’s advertising platform to discriminate against protected classes. Governor Cuomo said, “I am calling on the Department of Financial Services to investigate these claims and help ensure that New Yorkers seeking housing for themselves and their families are not discriminated against in any way. We will take aggressive action and ensure that those who are behind these reprehensible alleged practices are held fully accountable.”

Financial Services Superintendent Linda A. Lacewell said, “DFS is committed to ensuring that all New Yorkers are protected and not discriminated against, no matter whether they’re engaging in social media apps or simply opening a bank account. The Department will investigate Facebook advertisers to examine these disturbing allegations and we are prepared to take whatever measures necessary to make certain that all financial services providers are in compliance with New York’s stringent statutory and regulatory consumer protections.” According to reports, Facebook’s advertising platform allows advertisers to modify or block ads using ZIP code information to exclude consumers based on race, color, national origin, religion, familial status, sex and disability, among other classifications. Facebook touts its advertising platform as a powerful means for housing and housing-related advertisers to reach desired consumers. In addition to the specific tools made available to advertisers, Facebook also allegedly uses machine learning and predictive analytics to categorize users to project each user’s likely response to a given ad, which may recreate groupings defined by their protected class. Senator Kevin Thomas, Senate Chair of Consumer of Affairs Committee, said, “Large social media platforms have unprecedented access to our personal data. It is critical that we take a proactive approach in protecting our private data and preventing digital discrimination. I applaud Governor Cuomo for recognizing the seriousness of this issue, and for taking action to ensure that our personal data is not being used in deceiving and discriminatory ways. I am confident that DFS will work to address this critically important issue and continue to promote the protection of consumer privacy across New York State.” Senator Diane Savino, Senate Chair of Internet and Technology Subcommittee, said, “As Chair of the Committee on Internet and Technology, privacy and consumer data is of our utmost concern. We have held hearings on consumer privacy this session and I soon hope to move forward on legislation to better protect all New Yonkers. Thank you Governor Cuomo for taking the first step to ensure we’re getting ahead in this quickly evolving digital age.” During Governor Cuomo’s and prior administrations, New York has taken action to ensure the protection of consumers. In March, the Governor announced a new law limiting debt collections against deceased debtors and their families following reports that debt collection companies have tried to use techniques to pressure relatives for payments. Under the amendment, debt collection companies can no longer make any misrepresentation about the family’s obligation to pay the debt. Earlier this year, the Governor also launched an education initiative for the digital age, including an examination of the terms of service and privacy policies of popular web applications and services, following reports that Facebook secretly accessed personal information of users. In February, Governor Cuomo directed the New York Department of State, Department of Financial Services and other state agencies to investigate these reports and urged federal regulators to also take action to protect the rights of consumers. In May, the Governor called on the New York State Department of Financial Services and the New York State Department of Taxation and Finance to investigate TurboTax, H&R Block and other major tax return preparers following recent reports that these companies allegedly used Google advertisement and website features to deceptively hide additional tax filing options from low-income individuals who are eligible to file their taxes for free. In January, the Governor issued a consumer alert warning New Yorkers about a bug in the Apple FaceTime app that reportedly allowed users to receive audio and video from the device of the person were calling even before the person accepted or rejected the call. Governor Cuomo, in partnership with Attorney General Letitia James, immediately took action and announced an investigation into the privacy breach, directing New Yorkers to contact the Department of State’s Division of Consumer Protection to report consumer complaints. In addition, as part of the FY 2020 Enacted Budget, the Governor signed legislation passed by the legislature implementing sweeping reforms for licensing companies servicing student loans held by New Yorkers. The protections require that they meet standards consistent with the laws and regulations governing other significant lending products. The new statute also ensures that no student loan servicers can mislead a borrower or engage in any predatory act or practice, misapply payments, provide credit reporting agencies with inaccurate information, or any other practices that may harm the borrower. In the wake of data breaches at credit reporting agencies such as Equifax that exposed the private data of millions of New Yorkers, the Department of Financial Services—at the Governor’s direction—issued a final regulation requiring agencies with significant operations in New York to register with DFS for the first time and to comply with New York’s first-in-the-nation cybersecurity standard. The regulation also provides the DFS Superintendent with the authority to deny, suspend and potentially revoke a consumer credit reporting agency’s authorization to do business with New York’s regulated financial institutions and consumers if the agency is found to be out of compliance with certain prohibited practices.

These actions are aggressive, largely as a matter of consumer protection. If the administration does not overreach, they will all prove beneficial. Kudos to Gov. Cuomo on this one. –SA