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Airbnb’s lies increase its legal vulnerability

It's now clear the company is committed not only to violating the law, but also to lying to regulators and the public

For several hours last week, it seemed that Airbnb was abandoning its newly declared policy to ban West Bank Jews from its online short term rental service. On December 17, 2018, Senior Vice President Chris Lehane met with Israeli Minister of Tourism Yariv Levin, and at the conclusion of the meeting, according to Airbnb’s Israel representative, the two sides issued a joint statement that that “the new policy [against West Bank Jews] will not be implemented. Airbnb will continue the dialogue with the Israeli government on the issue.”

It didn’t last long. After several hours, a US spokesman for Airbnb claimed that the earlier December 17 statement had been “released in error,” and that Airbnb will press forward with its boycott of Jewish properties in Israeli-controlled areas of the West Bank. The later Airbnb statement emphasized that Chris Lehane was in Israel to help implement the discriminatory policy; as the statement put it, “Airbnb communicated that we are developing the tools needed to implement our [boycott] policy and that process includes continuing our dialogue with the Government of Israel and other stakeholders.”

This was hardly the first time Airbnb sowed confusion with its zigzagging pronouncements. From its very first announcement of its boycott on West Bank Jews on November 19, 2018, Airbnb has been reluctant to explain why it suddenly waded into the Arab-Israeli conflict with an act of illegal discrimination. Airbnb’s initial announcement claimed it was implementing a general policy regarding “listings in disputed regions,” but the only disputed region where Airbnb has decided to implement the policy is the West Bank, and the only listings it has decided to ban in the disputed West Bank are those in “Israeli settlements,” i.e., Jewish properties.

On November 21, 2018, an Airbnb official claimed to the Times of Israel that the company might implement its policy regarding “disputed regions” in other places in the world, citing Western Sahara — a territory that has been illegally occupied by Morocco for four decades and to which Morocco claims sovereignty to the disapproval of all other states in the world. The official stated, “Western Sahara is one example of a place where we will use this framework … for [banning] listings in occupied territories around the world.” But a month later, Airbnb continues to list Moroccan properties in occupied Western Sahara, and it has not signaled any impending steps to boycott properties in Western Sahara or any other disputed areas in the world other than Jewish West Bank properties.

Misinformation was also Airbnb’s strategy when outgoing Illinois Governor Bruce Rauner asked Illinois’ Investment Policy Board to examine whether Airbnb’s policy constitutes a boycott of Israel. Illinois law bars investments and certain kinds of state transactions with companies that boycott Israel, and the Investment Policy Board is responsible for examining whether company’s actions constitute what the law defines as a boycott. Airbnb’s Chris Lehane tried to ward off the legal penalty by telling the Board that not only is Airbnb following the same policy of banning properties in disputed territories around the world, its policy of banning properties in disputed territories is the same as that of US multinational hotel chains. Both of Lehane’s claims are lies — Airbnb has not banned properties in any other disputed area in the world, and no US hotel chain has adopted Airbnb’s policy of banning West Bank Jewish properties — and unsurprisingly the Investment Policy Board saw through Airbnb’s falsehoods. On December 12, 2018, the Board voted to acknowledge that Airbnb’s boycott is a boycott of Israel as defined by Illinois law.

Nonetheless, Airbnb repeated its false claim not to be boycotting Israel only five days later in its second December 17, 2018 statement, claiming that it “unequivocal[ly] reject[s] the BDS movement” (the movement to boycott, divest from and sanction Israel) even as it reaffirmed Airbnb’s intent to implement its new boycott policy directed solely at Israeli-administered territory.

It should be clear to everyone now that Airbnb has decided to respond to legal actions against and criticism of its new discriminatory policy not by withdrawing the policy but by digging in and defending the policy with a campaign of misdirection and falsehoods. The misinformation strategy is as difficult to understand as Airbnb’s decision to adopt the discriminatory policy in the first place. It is hard to see how Airbnb engenders good will or wins more business by violating the law and then lying about it. The only conceivable defense Airbnb can offer is no defense at all: its falsehoods have mostly been cleverly phrased evasions and misdirections rather than straightforward lies.

By dissembling, Airbnb is adding to its already considerable legal liability. Airbnb has rendered itself ineligible for state business and investment in many places in the US by violating anti-boycott legislation. In Israel, Airbnb has rendered itself liable for the payment of money damages to victims of the company’s boycott. Airbnb is already being sued in Delaware for its illegal discrimination against Jewish owners of properties in the West Bank.

Given Airbnb’s well-publicized intention to sell shares of the company on the market in an IPO next year, the lying exposes Airbnb to future lawsuits by investors for “material misrepresentations” made by the company in its attempt to defend its indefensible policy. Future investors will rightly be able to claim that Airbnb is not telling the truth about the regulatory liability created by its ill-considered policy against West Bank Jews or its even more foolish attempt to mislead regulators with false statements about the policy.

In the meantime, officials in both Israel and the US would do well to exercise caution in their future dealings with Airbnb. It has unfortunately become clear that Airbnb is not only committed to violating the law, but also to lying to regulators and the public. In both countries, officials would be best advised to treat Airbnb’s excuses and promises as presumptive lies until Airbnb can demonstrate that it is ready to start telling the truth.

About the Author
The author is a professor at Bar Ilan University’s Faculty of Law and the University of San Diego Law School, a senior fellow at the Kohelet Policy Forum, and a visiting fellow at the Project on the Foundations of Private Law at Harvard Law School.
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