Today in DC District Court, Airbnb successfully blocked a proposed class action alleging racial discrimination on the company’s platform. The lawsuit alleged systematic discrimination by Airbnb hosts, enabled by various design choices made by the company.

But after today’s decision, there won’t be a public ruling on the discrimination itself. The proposed class action will be moved into individual arbitration, in accordance with a crucial clause in Airbnb’s Terms of Service. The result is a quick finish to what could have been a long and damaging legal fight for the company.

"Statistical evidence has proven that [Airbnb’s] commercial design disproportionately impacts African American consumers seeking accommodations," the lawsuit alleged. "From its inception, Airbnb Inc. has sought to maintain a pattern and practice of mandating its users to conspicuously identify themselves through the use of head shots or facial photographs, biological names, and other personal identifiers before booking public accommodations."

"A pattern and practice of mandating its users to conspicuously identify themselves"

The plaintiff Gregory Selden encountered the alleged discrimination while attempting to book a room in Philadelphia in March of 2015. According to Selden’s complaint, he was rejected from one room, being told it was fully booked, but then found a separate listing advertising the same room as still available. Suspecting racial discrimination, Selden created two fake profiles with pictures of white users — dubbed "Todd" and "Jessie" — and attempted to book a room from the same host. Both attempts were successful. When Selden confronted the host about the apparent discrimination, the host replied that "people like [him] were simply victimizing [himself]."

Selden later shared his experiences on Twitter under the #airbnbwhileblack hashtag where he encountered a number of similar stories, suggesting grounds for a broader class action lawsuit.

The lawsuit alleges that Airbnb violated the Civil Rights Act of 1964, which explicitly prohibits discrimination in places of public accommodation — but after today’s ruling, Selden won’t have a chance to plead his case in court. The court ruled that by signing up for an Airbnb account, Selden had agreed to the mandatory arbitration clause in the company’s terms of service. As a result, any legal dispute with the company will be resolved through a private arbitration process out of public view. Crucially, that clause requires all cases to be brought individually, foreclosing the possibility of a broader class action by black Airbnb users. Selden disputed signing up for the service under those terms, but ultimately his efforts did not convince the judge.

"Todd" and "Jessie" booked the room without incident

Such arbitration clauses have become common in consumer and employment contracts, although their use has often been criticized as a way to short-circuit the legal system. In recent years, similar clauses have been used in a racial discrimination case brought by Taco Bell employees as well as multiple cases alleging systematic overbilling by telecoms. In each case, the result was to nip the proposed class action case in the bud.

Selden’s case comes as Airbnb is in the midst of an active campaign against discrimination by hosts. Earlier this month, the company added a new non-discrimination policy to its terms of service, in accordance with a third-party report published by the company in September.

When reached by The Verge, Airbnb said it was taking active steps to fight discrimination within its network of hosts. "Discrimination has no place in the Airbnb community," a company representative said. "We have launched an aggressive effort to ensure our platform is fair for everyone and we will continue to work as hard as we know how to fight bias."

Source: Motion to Compel, Complaint