Social media giant Facebook is allegedly allowing advertisers to post advertisements on their platform that can exclude users based on their race. The said ads may violate a number of laws in the US that prohibit discrimination of this kind.

Using its huge dump of personal data it collects from users, Facebook's business model for advertisers is based on allowing them to target specific groups based on interests on backgrounds. But a report by ProPublica shows how the system is being used to exclude specific groups it calls "Ethnic Affinities," that include black, Hispanic, Asian American and others.

An ad created by the portal for rentals shows how the system can be used to narrow down demographics by excluding certain groups like African Americans, Asian Americans and Hispanics. Once this filtering is selected the ad will not be available to those Facebook users who have declared their ethnicity on their profiles.

"This is horrifying. This is massively illegal. This is about as blatant a violation of the federal Fair Housing Act as one can find," says John Relman, a prominent civil rights lawyer to ProPublica.

Under the Fair Housing Act of 1968 it is illegal "to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin." Additionally the Civil Rights Act of 1964 also forbids the "printing or publication of notices or advertisements indicating prohibited preference, limitation, specification or discrimination."

Facebook, however, disagreed with these allegations saying it began offering the "Ethnic Affinity" categories within the past two years as part of a "multicultural advertising" effort.

"Ethnic Affinity is not the same as race — which Facebook does not ask its members about. Facebook assigns members an "Ethnic Affinity" based on pages and posts they have liked or engaged with on Facebook," says Steve Satterfield, privacy and public policy manager at Facebook.

But why the category "Ethnic Affinity" was included in the "Demographics" category of its ad-targeting system is not clear. Satterfield said Facebook may very soon move "Ethnic Affinity" to another section.