Justice Department sues Facebook for discriminating against US workers

Social media giant is also in hot water over its virtual reality business

Facebook sign at entrance of its campus

Facebook faced a double whammy from the US government recently, as the Department of Justice sued the company for discriminatory hiring practices and reportedly investigated its virtual reality business.

In a complaint released Thursday, the DOJ accused Facebook of favoring H-1B visa holders over Americans. This isn’t the first time in this year the H-1B visa program has drawn the ire of the US government, as President Trump attempted to freeze the program in June.

Under Department of Labor rules, temporary overseas workers must interview for a permanent position at their employer. The company must also advertise that position to others and interview applicants s normal. If the company can’t find a suitable worker in the US, it can hire a temporary H-1B worker. These workers can continue working in the US if they complete a permanent labor certification process.

"When certain employees holding temporary immigration status at Facebook asked the company for permanent positions through the permanent labor certification process, Facebook creates a permanent position that is open only to that temporary visa holder," the complaint said. The DOJ also claimed Facebook intentionally deterred US workers from applying by failing to advertise those positions on its website and not accepting applications online.

The DOJ's complaint follows an investigation that began in October 2018. It said that in the 11 months to September 2019, Facebook filed 2,651 requests to convert temporary workers to lawful permanent residents, and 2,606 of those succeeded. The DOJ claims the average salary for those positions was over $156,000.

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The government has asked the court to force Facebook to pay civil penalties and damages to each alleged victim of discrimination who lost wages due to its practices.

Bloomberg also warned that the DOJ has been talking to developers about possible antitrust practices within Facebook's virtual-reality business. The DOJ claimed the company, which bought VR headset maker Oculus for $2 billion in 2014, has used its power in the VR market to favor its technology over others.

Bloomberg spoke to developers who alleged the social media giant had deliberately engineered its VR platform not to work with their products, only to launch competitive ones shortly afterward. One developer said the company ordered him to remove a streaming feature from his Oculus software before launching a competing product called Oculus Link.

A competitor also told Bloomberg Facebook uses predatory pricing by selling headsets at a loss to flood the market. Another developer claimed Facebook forces them to pay a 30% commission on content sold through its platform. Apple, which also charges a 30% fee for content sold through its App Store, recently reduced its fee to 15% for smaller developers.

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