It seemed straight out of the evil-tech-company playbook.
In August, Facebook secured an otherwise innocuous U.S. patent about how to analyze a user’s friend network to let them do something. Most of the patent discusses the fairly mundane technicalities of running a social network—until, last in a list of examples, there appeared the following paragraph:
When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual […]. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.
In other words: The patent would let a bank analyze your Facebook friends when you applied for a loan. If too many of your friends have poor credit histories, the bank could reject your loan application—even if your own credit was fine.
Some critics argue that this patent could resurrect historic discriminatory loan practices: “Facebook Wants to Redline Your Friends List,” said one headline. And it makes a certain sense. In 20th-century redlining, banks would deny mortgages to people because they lived in neighborhoods that were too black. But in redlining’s spiffy new 21st-century form, they argue, banks can do one better: They can deny loans to people not because of where they live, but because of whom they fraternize with. Since one’s friends so closely mirror one’s race and class—according to one study, nine out of 10 of the average white American’s friends are also white—the practice would effectively restore loan discrimination. (It’s worth adding that traditional redlining was encouraged, even dictated by, the U.S. government.)