(Bloomberg) -- Airbnb Inc. said it will allow hosts and guests to sue the company over claims of sexual assault and harassment in its listings, lifting a mandatory arbitration clause that's been buried in its 40-page terms of service for more than a decade.
The update will be reflected in the next iteration of the company's terms of service in the fall, the company said in a statement Friday, without specifying a date. “We believe that survivors should be able to bring claims in whatever forum is best for them,” the statement said. “We encourage our industry peers within the travel and hospitality space to consider taking similar steps for their respective communities.”
The move comes after a Bloomberg Businessweek investigation of violent crimes, including rapes, at Airbnb listings. That story highlighted the lengths the home-share company will go to keep such incidents quiet -- sometimes spending millions of dollars on settlement payouts and using the binding arbitration clause in its terms of service to block users from filing claims for damages in court. In the course of follow-up reporting, Bloomberg has been asking Airbnb for weeks about details surrounding its arbitration policy.
Read more: Airbnb Spends Millions of Dollars to Make Nightmares Go Away
Since as early as 2011, Airbnb's terms of service has included a clause that says any dispute arising out of a stay booked on the platform will be settled through binding arbitration. All of Airbnb's 150 million or so users were required to agree to this when they registered, meaning they signed away the right to sue.
The use of forced arbitration became a flashpoint in corporate America during the #MeToo movement. Many businesses started distancing themselves from the practice because of the way it shields corporations from public accountability. In 2018, Airbnb, along with Microsoft Corp., Google and Facebook Inc., removed binding arbitration in sexual assault and sexual harassment claims filed by employees. Sharing-economy peer Uber Technologies Inc. went further, updating its terms of service to eliminate forced arbitration for passengers and drivers.
Airbnb said the change to its terms of service “will codify a practice we have already had in place.” The company said that since January 2019 it has not asked a court to force any sexual assault or sexual harassment cases into arbitration. But Airbnb didn't make any public announcements about changing this practice or update its terms of service.
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