Startup News & Analysis

Airbnb’s West Bank lawsuit: Should Aussie startups think twice about getting political?

Stephanie Palmer-Derrien /

Home-sharing startup turned tech giant Airbnb is facing a class action lawsuit following a decision to remove 200 listings in disputed Israeli settlements in the West Bank.

Geographically, the West Bank is an area with a complex history at the heart of the Israel-Palestine conflict. And, according to a Reuters report, 18 plaintiffs view Airbnb’s decision as taking sides, and discriminatory.

Politics isn’t Airbnb’s usual patter, but according to a November statement from the US startup, it’s launching a new global framework for how it treats disputed territories.

In Israel, bookings are still available in East Jerusalem and Golan Heights, however, Airbnb has previously removed listings in Crimea as a result of international sanctions.

Should tech companies be taking a stand on this kind of political issue? When they have global voice, would it be remiss not to make it heard, or should they stick to their day jobs?

When announcing it was removing listings in West Bank, Airbnb acknowledged it is “most certainly not the experts when it comes to the historical disputes in this region” in a statement.

“Our team has wrestled with this issue and we have struggled to come up with the right approach,” the company said.

“We must consider the impact we have and act responsibly.

“We know that people will disagree with this decision and appreciate their perspective. This is a controversial issue.

“There are many strong views as it relates to lands that have been the subject of historic and intense disputes between Israelis and Palestinians in the West Bank. Airbnb has deep respect for those views.”

However, according to Reuters, the 18 Israeli-American plaintiffs, families and individuals who own or wish to rent homes in West Bank, allege Airbnb is violating the US Fair Housing Amendments Act 1988.

They allege Airbnb is not applying the same standards to other occupied areas in the world and is discriminating against Jewish people.

According to a BBC report, Israel’s tourism minister has called Airbnb’s actions “shameful”, and said Israeli authorities will back any legal challenges.

In a statement sent to StartupSmart, Airbnb specified any host with listings in the affected area will be able to keep listings in other areas.

“Major US-based multinational hotels do not offer accommodations in these settlements … We don’t believe this lawsuit will succeed in court, but we know that people will disagree with our decision and appreciate their perspective,” the statement said.

Speaking to StartupSmart, Kurt Falkenstein, founder and Australian Principal of startup specialist lawyers General Standards, says there’s more and more pressure on tech companies to act in a socially responsible way, and so there should be freedom for them to express political will.

It’s “almost the equivalent of free speech”, he says.

“It’s not fair to put those kinds of social expectations on them, and then not respect their decision to make a stand politically and socially,” he adds.

“Within the bounds of the law, I think that’s super important.”

That said, first and foremost, any business has a responsibility to its shareholders.

In Airbnb’s case, this includes its customers. While the decision to pull out of the West Bank may appear political, there’s a chance the company was merely acting to keep its customers safe, Falkenstein says.

“You would expect a company should be careful about making decisions that could potentially negatively impact its stakeholders,” he says.

If something happens to a guest staying in a disputed territory, Airbnb could be liable.

“The fact is that it could be a purely commercial decision based on health and safety. But it can be reinterpreted as a political decision and misconstrued. Companies are an easy target sometimes when their commercial decisions can’t be separated from political ones,” Falkenstein says.

“But I think it’s extremely important that companies don’t shy away from some of the political ramifications of taking care of their stakeholders.”

When dealing with politically-weighted issues, any decision that appears to lean one way or another will be unpopular with someone. For example, if a business chooses to only use energy from renewable sources, “there are probably people who would want to take a lawsuit against that”, Falkenstein says.

“It’s very hard to stop people from suing you,” he adds.

In Australia, there is no shortage of prominent tech entrepreneurs weighing in on political issues. Leaders of such startups have an “outsized voice” to speak to both their customers and a community in which they’re respected.

“It will be corporations that take the first steps in creating social change and political change,” Falkenstein says

Freelancer founder Matt Barrie, for example, has been an outspoken critic of Sydney’s lockout laws, while Atlassian co-founder Mike Cannon-Brookes is a vocal proponent of renewable energy in Australia, famously calling out Prime Minister Scott Morrison on his ‘fair dinkum’ power pledge.

“It’s foolish – if people are socially minded and in a socially leverage position – to not use that leverage. But it’s not a moral obligation,” Falkenstein says.

“Just because you’ve reached a position of business success, that shouldn’t obligate you to take a stand on public issues. And to be honest, most don’t,” he adds.

“But, it’s so important that the freedom for those that wish to do it is enshrined.”

NOW READ: Airbnb executive on why startups must work with the community, and government, for a better future

NOW READ: Why startups can’t ignore corporate social responsibility

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is a reporter at StartupSmart.

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