Complaint. Answer. DOT request for evidentiary support and AA response. Docket and public comments.
Status: Dismissal.
Summary: price advertising violations including mischaracterizing surcharges as “tax”
Complaint. Answer. DOT request for evidentiary support and AA response. Docket and public comments.
Status: Dismissal.
Summary: price advertising violations including mischaracterizing surcharges as “tax”
"Man is a tool-using animal Without tools he is nothing, with tools he is all." – Thomas Carlyle, 1834
I’m rarely effusive in my praise for a new tool, but I can hardly overstate my excitement about Bubble, a web programming system. The basic concept: Draw the web app you want, using standard components like text boxes, images, and buttons. Create "thing" objects to hold the app’s data, specifying the characteristics (fields) of each thing and the way one type of object relates to another. Then add flowchart-style "workflow" procedures to explain what happens when. Amazingly, this process yields a multiuser interactive web app that works as you instructed and as you’d expect.
Use Cases
Bubble is a particularly clear fit for entrepreneurs whose business concepts call for custom web apps. Suppose you have an idea for an online service—maybe you’ll match dog-walkers with dog-owners needing assistance, or you’ll help annoyed motorists report commercial drivers parked illegally. For such a project, you might hire a developer through a service like Upwork. But an outsourced developer carries some important problems. For one, the developer might not see the vision you have in mind, despite your best efforts to explain the features desired. (That’s all the tougher because many entrepreneurs don’t have experience writing specifications or providing precise requests.) In all likelihood, you’ll want some adjustments based on tests with early customers and a better understanding of their needs. Even if things go perfectly, you’ll often end up beholden to the developer for future changes; switching developers often entails prohibitive delay and expense given the difficulty of editing other people’s code. Meanwhile, developers also worry about creeping project scope, unclear requirements, and payment disputes—so they end up having to quote high fees in anticipation of these predictable problems. Entrepreneurs often accept these tradeoffs for lack of alternatives. But Bubble offers another way—letting a diligent entrepreneur build a working prototype without an outside technical specialist. Doing the work yourself, there’s no risk of communication breakdown, and changes entail effort but not out-of-pocket expenditure. A surprisingly committed community of other Bubble users provides assistance with anything unexpected.
In fact, Bubble should be equally useful in established organizations. Most companies have centralized software for their core processes, but often ad hoc solutions around the edges. Software for submitting expense reports, requesting a loaner laptop, or signing up for the company softball team? These are usually ad hoc, making do with Dropbox or Google Docs or a piece of paper on a clipboard. Furthermore, as a company’s core business changes, some features end up missing from the company’s main software systems. Often tools are carryovers from decades past—making it difficult to add modern improvements. One might hope that well-run companies would prioritize their requirements for robust implementation by centralized IT staff. But finding development resources can be surprisingly difficult, with constant pressure from excess requests. Here too, Bubble offers a promising alternative, allowing the end users who best know a situation to write the software that will make them more efficient. Savvy end-users have been building this kind of thing for years, all the way back to the PC revolution. But with Bubble, it’s modern, web-enabled, and API-connected.
Bubble in Context
It’s natural to compare Bubble to Visual Basic, the Microsoft programming environment that made programming accessible to a generation of self-taught enthusiasts (myself included). But where VB ultimately requires developers to write code (albeit in a relatively intuitive language), Bubble does not. Instead, Bubble’s workflow instructions are graphical, composed of actions like "make changes to a thing" or "go to page," each chosen from a menu. Then there’s no frightening blank screen confronting a new developer, and no magic syntax to learn.
In some respects, Bubble is closest to worksheet functions, widely used in Microsoft Excel, Apple Numbers, and Google Sheets. One might also compare Bubble programming to macros in Microsoft Access or scripts in FileMaker Pro. In each of these environments, as in Bubble, designers use a series of predefined functions, chosen from an on-screen menu, to create software logic. But Bubble’s apps can do notably more. For example, compared with Excel, Bubble boasts a full relational database with custom types a user creates. And where Excel files usually reside on a user’s hard drive, Bubble apps run in the cloud—naturally combining data from multiple users with full interactivity. Running in the cloud, Bubble can easily interact with other services—show a Google Map, charge a user’s credit card, add an email to a mailing list.
Bubble is arguably closest to Microsoft Visual Studio LightSwitch, which similarly helps casual developers build web forms to access server-side data, automating low-value "plumbing" tasks. Indeed, I’m a big fan of LightSwitch. But LightSwitch comes with some baggage from its Microsoft roots. The paid license isn’t a showstopper for serious users, and these days LightSwitch can build standard HTML apps usable on any platform and in any browser. Ultimately, most LightSwitch apps require that users write some code, creating a steeper learning curve and excluding a fair number of users who can make good use of Bubble.
One might also compare Bubble to the various web site templates. Two decades ago, GeoCities made it easy to make and host a web site with no code required—but Bubble is quite different, building interactive database-backed applications , not just static web pages. Some modern template-based tools allow limited interactivity such as shopping carts and signup pages. With these tools, users are stuck with the logic that a designer anticipated; it’s usually possible to hide unwanted options or add extra pages, but not to change the underlying concept or workflow. In contrast, Bubble lets a designer build an arbitrary site and with a novel structure.
Handholding for those who need it
Many advanced users can reasonably follow Bubble’s online training, then design their own apps. Indeed, that’s how I learned Bubble. The company’s interactive lessons show key tasks.
A set of consultant-advisors now offer another way. Broadly, these vendors use Bubble to write apps more quickly and at lower cost than typical consultancies, passing much of the savings back to customers. And if customers later want to make modifications of their own, they can learn a bit of Bubble in order to do so at zero out-of-pocket cost.
I’m most familiar with AirDev, a design shop where business-oriented generalists build Bubble apps to suit customer requirements. A few months ago, AirDev added a "sprint" option with flat pricing and an amazing five day turnaround for scope and build. They offered me a free test, building a custom scheduling app to my specifications. I told them what I wanted; they came back with reasonable clarifying questions; and a week later I had an app. I sent a few adjustment requests, which they quickly implemented. And when I had subsequent ideas for further improvement, I used the standard Bubble development environment to make changes. I’m now using the tool with students, to rave reviews.
Limitations
When I first tried Bubble a few years ago, I found some significant limitations—difficulty getting data in and out, limitations on what APIs were supported, sluggish pages. Those challenges all seem to be in the past. Meanwhile, a lively forum of Bubble enthusiasts helps to vet and prioritize feature requests, accelerating improvements.
My relationship with Bubble
I wrote this post on my own, not at the request of Bubble or AirDev. I’m a big fan of their approach but have no economic relationship with either company. AirDev’s generous offer of a free "sprint" came out-of-the-blue and with no strings attached, not contingent on my writing about it; I elected to do that on my own because I was so impressed with their offering.
Bubble was founded in 2012 by Josh Haas and Emmanuel Straschnov. Though Emmanuel was not my student during his time at HBS, he has been kind to the school, including assisting numerous "FIELD 3" student teams working on rapid-turnaround microbusinesses, as well as guest-teaching in my class as part of my efforts to help business students strengthen their software engineering skills.
AirDev came in part from one of my former students, Andrew Haller, who joined with Vlad Leytus based on their shared experience wanting to make it easier to build online services. As I mentioned above, AirDev offered me a free "sprint," but this article was at my own initiative.
Edelman, Benjamin, and Zhenyu Lai. “Design of Search Engine Services: Channel Interdependence in Search Engine Results.” Journal of Marketing Research (JMR) 53, no. 6 (December 2016): 881-900. (First posted April 2013.)
The authors examine prominent placement of search engines’ own services and effects on users’ choices. Evaluating a natural experiment in which different results were shown to users who performed similar searches, they find that Google’s prominent placement of its Flight Search service increased the clicks on paid advertising listings by more than half while decreasing the clicks on organic search listings by about the same quantity. This effect appears to result from interactions between the design of search results and users’ decisions about where and how to focus their attention: users who decide what to click based on listings’ relevance became more likely to select paid listings, while users who are influenced by listings’ visual presentation and page position became more likely to click on Google’s own Flight Search listing. The authors consider implications of these findings for competition policy and for online marketing strategies.
Edelman, Benjamin, and Lena Goldberg. “Three Problems in Protecting Competition.” Harvard Business School Case 917-012, November 2016. (Revised March 2017.) (educator access at HBP. request a courtesy copy.)
In three mini-cases, readers see a range of disputes in competition lawand apply legal principles to assure fair competition.
Teaching Materials:
Three Problems in Protecting Competition – Teaching Note (HBP 917014)
In the United States, there are seven basic options for a consumer who wishes to pursue a dispute with an airline, travel agent, or tour operator:
This page elaborates on the seventh option, formal DOT complaints, as this process is not widely understood and not widely used despite its important potential benefits as detailed above.
For those inclined to proceed with formal DOT complaints, here are my tips based on the several such complaints I have filed and based on others’ complaints that I have followed.
There are five steps to filing a formal complaint with the DOT:
To: [agent email from step 2], blane.workie@dot.gov; robert.gorman@dot.gov; kimberly.graber@dot.gov
Subject: Third party complaint of [your name] – [airline name] – [date]
Greetings,
A redacted public complaint (as to certain practices of [airline name]) was filed on Regulations.gov earlier today. Attached is the full version including private information.
Regulations.gov Comment Tracking Number: [insert comment tracking number]
Thank you,
[your name]
The DOT contacts change from time to time. The three DOT contacts listed above are current (to my knowledge) as of October 2016.
Here’s what to expect after filing:
Once your complaint is docketed at Regulations.gov, you’ll usually get an email from DOT staff to that effect. If not, wait a few days, then run a search for your last name on Regulations.gov. Each Regulations.gov docket page provides a mechanism for automatic email notification when new filings are made in that docket. I highly recommend using that notification mechanism, including renewing it annually if your complaint remains unresolved after one year. Sometimes DOT or airline staff may forget to (or otherwise fail to) notify you of a new filing.
Formal complaints are governed by DOT rules contained in 14 CFR 302 subpart D. It’s useful to read those rules to learn what to expect.
An airline must respond to your complaint (by filing its “Answer”) within 15 days, unless it requests and receives an extension from DOT. DOT staff usually provide such an extension when requested. Airline representatives will ask you to accept, which you virtually must – in the sense that if you declined, the DOT would probably grant the extra time anyway. It’s also polite to grant the extra time; the benefit of this formal complaint process is its formality and its rigor, not its speed.
There is no guarantee of any particular timing for DOT judgment or resolution. Many complaints have gone more than a year without resolution. After a lengthy wait, you could inquire with DOT staff or contact your federal representatives to seek their assistance. I have not used these methods.
In general, a complainant has no right to respond to an airline’s Answer. If you want to file such a response (a “Reply”), you should seek agreement from the airline to do so (typically followed by a counter-response from the airline, called a “Surreply”). You must then seek DOT permission to reply. This can be an informal email to DOT attorneys, CC’ing the airline representative. You may want to propose a maximum page length, timing, and purpose. You’ll adapt the Complaint Template to file your reply, including replacing the “Complaint” heading with “Reply” (in every location including first page caption, second page caption, first page header, and subsequent page header) and adding the docket number on the first and second pages.
Once you file a formal complaint, you should avoid informal communications with DOT staff on the same subject.
Others have reported that airlines sometimes attempt to “buy off” a complainant privately – provide some money or whatever a complainant is requesting, in exchange for the complainant withdrawing the complaint. If you accept such an offer and withdraw your complaint, there will probably be no further proceedings in the docket, and hence nothing to benefit other passengers with similar problems. On the other hand you’ll get an immediate personal benefit.
I am unable to provide legal assistance to complainants, but I am often able to provide procedural pointers based on my experience in this area. Contact me.
My sincere thanks to Edward Hasbrouck, whose special knowledge of all things aviation-consumer spurred my interest in this subject. Thanks also to Mike Borsetti, whose knowledge of fare rules helped me understand my rights.
When something goes wrong in air travel, consumers often need to reach an appropriate resolution with airline staff. But the standard methods are not always sufficient — sometimes ordinary customer relations staff are intransigent or just unresponsive, and a credit card chargeback is a poor fit for disputes that can be surprisingly complex.
In today’s post, I present a dispute resolution channel most consumers do not know about: formal complaints before the US Department of Transportation. The process lives up to the “formal” label, requiring documents formatted in a particular way, submitted through both web upload and email (neither particularly intuitive), with all proceedings posted for public review. But this approach typically goes straight to airline attorneys, and the on-the-record public proceeding helps assure high-quality discussion. In today’s piece, I explore known dispute resolution methods, then give interested consumers a guide to the DOT Formal Complaint process.
My guidance:
In September 2015, the Russian Federal Antimonopoly Service announced its decision that Google had violated Russian law by tying its mobile apps to Google Play and setting additional restrictions on mobile device manufacturers, including limiting what other apps they install and how they configure those apps and devices. These topics are of great interest to me since I was the first to publicly distribute the Mobile Application Distribution Agreements, and because I explored related questions at length in my 2015 article Does Google Leverage Market Power Through Tying and Bundling? and more recently my working paper Android and Competition Law: Exploring and Assessing Google’s Practices in Mobile (with Damien Geradin).
For those who wish to understand the reasoning and conclusions of Russia’s FAS, one key limitation is that the September 2015 decision is available only in Russian. While the case document library summarizes key facts, allegations, and procedural developments, that’s no substitute for the full primary source documents.
In the course of expanding my Android and Competition Law paper, I recently obtained an English translation of the September 2015 decision. The decision is unofficial but, as best I can tell, accurate and reliable. It suffers redactions, but the original in Russian has the same limitation. I offer it here to anyone interested:
This month Airbnb released a report investigating discrimination by its hosts against guests (including racial minorities and others), assessing the evidence of the problem and evaluating proposed solutions. The accompanying announcement offers lofty principles—"creating a world where anyone can belong anywhere."
In contrast to the company’s prior denials, Airbnb now admits the problem is urgent: "discrimination must be addressed"; "minorities struggle more than others to book a listing"; "some members of the community did not receive the timely, compassionate response they expected and deserved when they reported instances of discrimination"; Airbnb’s nondiscrimination policy was not widely known, within or outside company. This much is beyond dispute.
While Airbnb’s report is a step in the right direction, it does little to address the crucial subject of how to actually fix the problem of discrimination. Indeed, the report proposes actions of uncertain or unproven effectiveness. At the same time, the report quickly dismisses a simpler alternative response—removing guest photos and names from booking requests—which would be far more likely to succeed. Meanwhile, the report completely fails to defend the legal gamesmanship by which Airbnb avoids litigation on the merits when consumers complain about Airbnb, and the report equally fails to defend Airbnb’s continued prohibition on users conducting research to uncover and measure discrimination for themselves.
This article offers my critique.
Airbnb’s bottom line
What exactly did Airbnb commit to change?
Airbnb plans to increase the number of "Instant Book" properties, with a stated goal of one million by January 2017. Instant Book offers a potential mechanism to reduce discrimination: When hosts pre-promise to accept any interested guest who agrees to pay, they do not have the ability to screen each individual guest’s request, therefore leaving much less opportunity to discriminate.
Nonetheless, Instant Book addresses only a portion of the problem. If disfavored guests are limited to Instant Book properties, they are left with a reduced set of properties, typically meaning an inferior match with their preferences as well as higher price and less flexibility. Furthermore, hosts can use cancellations—permitted, in certain quantities, under Airbnb’s rules—to undo the anti-discrimination benefits of Instant Book.
Moreover, Airbnb’s million-property goal is at best ambiguous. Airbnb doesn’t say how many Instant Book properties are already available, so it’s hard to assess how big an increase that would be or how realistic it is. Nor does Airbnb indicate the methods to be used to achieve the increase. If January comes and the objective has not been reached, what then?
Airbnb says it will "experiment with reducing the prominence of guest photos in the booking process." Certainly photos have been prominent, and to its credit Airbnb now agrees excessively so, in light of the limited information they actually convey and the superiority of other information (like objective verifications).
Notably, Airbnb’s plan to experiment with reduced photo size has been misreported in the press. For example, the Wall Street Journal reported that Airbnb "is planning to reduce the prominence of guests’ photos," and Diversity Inc. reported that Airbnb’s changes "include displaying photos less prominently." But Airbnb’s actual promise wasn’t to reduce photo prominence. Rather, the company promised only to run an experiment, of unspecified duration and scope, with no commitment whatsoever as to subsequent changes. With so many caveats, it’s hard to put much weight on this response.
Effective November 1, Airbnb will require users to accept a stronger and more detailed nondiscrimination policy: "By joining this community, you commit to treat all fellow members of this community, regardless of race, religion, national origin, disability, sex, gender identity, sexual orientation or age, with respect, and without judgment or bias."
Airbnb’s policy offers commendable principles. But the company’s existing policy already included the same substance as the new wording. Will a compulsory screen or checkbox actually prevent hosts from continuing to discriminate? Airbnb offers no evidence that a restated policy will make a difference. Indeed, experience from other types of discrimination suggests that those who seek to discriminate will change only slowly and under significant pressure.
Sometime during the first half of 2017, Airbnb promises to modify its site to prevent a host from telling one guest that a property is unavailable, then later accepting another guest’s request for the same nights. This change seeks to penalize hosts who falsely claim a property is unavailable: If a host rejects a guest due to a false claim of unavailability, the host won’t be able to keep the property listed for others, making the pretextual rejection more costly.
Unfortunately, there’s little reason to think this approach will operate as claimed. Instead, strategic hosts will switch to other reasons for rejecting guests—reasons guests can less readily prove to be pretextual. An "unavailable" response would prevent the host from booking the property to someone else, but the host can instead specify some other reason for declining the request. So there’s little reason to think this change will stop those who want to discriminate.
This change will also hinder guests’ efforts to demonstrate discrimination. After rejection, a concerned guest may ask a friend to inquire (or creates a test account to do so), thereby proving that the rejection was due to guest identity and not genuine unavailability. This second inquiry provides a valuable verification, checking whether the host can keep his story straight. Substituting automatic software logic for fallible hosts, Airbnb makes it more difficult to catch a host in a lie.
Finally, Airbnb offers no explanation why the company needs four to ten months to build this feature. Airbnb’s site already offers multiple categorizations for each night including available, unavailable, and booked. By all indications, this architecture could easily be extended to offer the promised feature—for example, a new status called "booked-locked" that a host cannot change back to available. If this feature is important and useful, why wait?
The proposed changes share common weaknesses. They all rely on unproven and indeed unstated assumptions about how hosts will respond. And each change leaves ample room to question whether it will help at all. One might hope the combination would be more than the sum of its parts. But when each change falls so far short, it’s hard to be optimistic. These are not the "powerful systemic changes" Airbnb promises.
The better policy: remove guest names and photos
In sharp contrast to the indirect changes Airbnb proposes, a much simpler adjustment would more directly prevent discrimination: remove guest photos and names from the information a host sees when evaluating a guest’s request. If a host could not see a guest’s photo and name before accepting a booking, the host would have no way to determine the guest’s race, age, gender or other characteristics. Even a host who wanted to discriminate would not have the information to make a decision based on the improper factor.
Removing photos and names is particularly compelling in light of best practice developed over decades in other contexts. In 1952, the Boston Symphony Orchestra began to audition musicians behind a screen. The result was a sharp rise in the number of female musicians—widely interpreted to be a decrease in arbitrary and improper discrimination. Similarly, Massachusetts landlords cannot ask about race, national origin, sexual orientation, age, religion, and myriad other factors—for there is little proper reason to make such inquiries, and if landlords have this information, many will struggle not to use it improperly.
Airbnb admits that "some have asked Airbnb to remove profile photos from the platform." But oddly Airbnb offers zero discussion of the benefits that approach might offer. If Airbnb thinks removing photos would not reduce discrimination, the company offers no statement of its reasoning. And Airbnb similarly says nothing of the other contexts where similar landlords, employers, and others have similarly elected to conceal information to reduce discrimination. Meanwhile, Airbnb says absolutely nothing of my proposal that hosts see guests’ pseudonyms, not actual names, when considering a request. Instead, Airbnb focuses on three supposed benefits of continuing to show photos before booking.
First, Airbnb argues that photos are "an important security feature: hosts and guests want to know who they will be meeting when a stay begins." Here, Airbnb’s report echoes April 2016 comments from Airbnb’s David King, Director of Diversity and Belonging, who told NPR: "The photos are on the platform for a reason. … You want to make sure that the guest that shows up at your door is the person that you’ve been communicating with."
This reasoning is particularly unconvincing. No doubt, hosts and guests should eventually see each other’s photos—but after a booking is confirmed.
Second, Airbnb says "profile photos are an important feature that help build relationships and allow hosts and guests to get to know one another before a booking begins."
Airbnb’s reasoning ignores the competing interests at hand. Perhaps profile photos help some guests and hosts get to know each other. But they also impede bookings by certain guests—notably including victims of longstanding and multifaceted discrimination. How should we weigh a small benefit to many, versus a large cost to a smaller (but important) group? At the same time, the "relationship" benefit is particularly shallow when the host offers an entire property, often with keys handed off via a doorman or lockbox, so the guest and host may never even meet in person. When there is little or no "relationship" to build, Airbnb’s reasoning provides particularly poor support for a policy that harms disadvantaged guests.
Meanwhile, Airbnb’s "get to know one another" principle is undercut by the company’s actions in other contexts—calling into question whether this factor should be taken at face value. Notably, Airbnb prevents hosts and guests from sharing email addresses and phone numbers before confirming a booking, running software to scan every message for prohibited material. Airbnb does not impose these restrictions because they in some way help build relationships between users; quite the contrary, these restrictions prevent users from talking to each other directly, by email or phone, in the ways they find convenient. Rather, the Airbnb imposes these restrictions to protect its business interests—preventing guests from booking directly and circumventing the company’s fees. Airbnb’s "get to know one another" purpose thus seems conveniently self-serving—invoked when it supports Airbnb’s favored approach, but quickly discarded when costly.
Third, Airbnb proposes that "guests should not be asked or required to hide behind curtains of anonymity when trying to find a place to stay." The report continues: "technology shouldn’t ask us to hide who we are. Instead, we should be implementing new, creative solutions to fight discrimination and promote understanding."
Here too, Airbnb’s approach favors the preferences of the many over the needs of those who face discrimination. While Airbnb frames its approach as not asking guests to be anonymous, in fact Airbnb does much more than that: Airbnb affirmatively prohibits guests from being anonymous, including requiring that guests register using their real names, validating names against government s and credit records, and presenting each guest’s real name, not a pseudonym, for host approval. Far from giving guests more choice to reveal or withhold information, Airbnb requires guests to reveal information—even when research makes clear that the information facilitates discrimination.
If there was reason to think Airbnb’s other changes would actually, completely, and promptly end discrimination by hosts, guests might feel confident in sharing sensitive information such as race. But given the likelihood that discrimination will continue despite the changes Airbnb promises, disfavored guests have every reason to want to conceal information that could facilitate discrimination. Airbnb’s policy continues to disallow them from doing so.
Some might counter that Airbnb hosts are informal and ought to have more information than hotels or ordinary landlords. Indeed, one might imagine a policy that distinguished between classes of hosts. If a host occasionally offers a shared room or a portion of a property with the host on site, the relationship feels informal, and some might argue that anti-discrimination rules are overkill in such situations. Conversely, if the host is off-site and the guest uses the property exclusively, the arms-length relationship looks more like a hotel. By all indications, the latter is vastly more common than the former (whether measured in nights booked or, especially, revenue). Airbnb’s report could have considered policies that vary based on the property type—perhaps retaining photos and names for the most informal hosts, where personal interaction between guests and hosts is a realistic possibility, while removing them for hosts offering arms-length rental of entire properties. But Airbnb devoted not a single sentence to this possibility.
Airbnb report’s silence on compulsory arbitration—and the prior positions of Airbnb’s distinguished consultant-advisors
Airbnb’s report is completely silent on the company’s requirement that users arbitrate their disputes. Nowhere mentioned in the report, despite criticism in media discussions of discrimination at Airbnb, the company’s Terms of Service make arbitration compulsory for all complaints users may have about any aspect of Airbnb’s service. Airbnb drafted the arbitration requirement and does not allow users to negotiate its provisions (or anything else). The arbitration policy requires that any concerned user bring a claim on an individual basis, not in any kind of group with others who have similar concerns. The predictable—and by all indications, intended—effect of Airbnb’s arbitration requirement is that users cannot obtain meaningful relief for a broad set of complaints they may have against Airbnb.
Distinguished consumer organizations have widely criticized arbitration as improper for consumers’ disputes with companies. But for Airbnb, arbitration offers both procedural and substantive benefits. No individual consumer could bring a compelling arbitration case against Airbnb: There would be no economic rationale for an attorney to accept such a case, as even the most favorable resolution of the dispute would bring a small recovery and correspondingly limited funds to pay for the attorney’s time. Only representing hundreds or thousands of consumers, en masse, would justify the time and talent of top attorneys. But Airbnb’s arbitration clause specifically disallows class actions and other group suits.
Moreover, arbitrators are chosen through processes that bias them against consumers’ claims. One lawyer recently explained why arbitration tends to favor companies over consumers: "I use the same arbitrators over and over, and they get paid when I pick them. They know where their bread and butter comes from."
In the context of discrimination at Airbnb, new and novel questions make arbitration particularly inappropriate. Arbitration lacks an appeal process where different judges evaluate an initial decision—the proper way to develop policy in new areas of law. And with arbitration results secret, even if one consumer prevailed in arbitration, others would not learn about it. Nor would other arbitrators be bound by a prior dispute’s conclusions even in identical circumstances.
Tellingly, Airbnb is at this moment invoking its arbitration requirement to attempt to dispose of class action litigation alleging discrimination. In May 2016, Virginia resident Gregory Selden filed a class action complaint, alleging that discrimination on Airbnb violated the Civil Rights Act of 1964, 42 USC 1981, and the Fair Housing Act. In response, Airbnb did not dispute that Selden had faced discrimination, nor did Airbnb explore the question of whether the host, Airbnb, or both should be responsible. Rather, Airbnb merely invoked the arbitration provision, arguing that the court could not hear the dispute because Airbnb required all users to agree to arbitrate, and thereby required all users to promise not to sue. As of September 2016, the court has yet to rule. (Case docket.)
Throughout its report, Airbnb cloaks itself in the names and resumes of distinguished advisors (including a seven-page personal introduction from the author and additional listing of experts consulted). But Airbnb’s advisors have taken tough positions against compulsory arbitration—positions which undercut Airbnb’s attempt to invoke arbitration to avoid judicial scrutiny of its practices.
Consider the position of the ACLU during the time when Airbnb consultant Laura Murphy, the report’s sole author, was ACLU’s Legislative Director. In a 2013 letter to senators considering the Arbitration Fairness Act of 2013, the ACLU explained the importance of "end[ing] the growing predatory practice of forcing consumers to sign away their Constitutional rights to legal protections and access to federal and state courts by making pre-dispute binding mandatory arbitration clauses unenforceable in civil rights, employment, antitrust, and consumer disputes." The letter continued: "Forced arbitration erodes traditional legal safeguards as well as substantive civil and employment rights and antitrust and consumer protection laws." Similarly, the ACLU’s 2010 letter also noted that "[f]orced arbitration particularly disadvantages the most vulnerable consumers." Murphy’s position at the ACLU entailed overseeing and communicating ACLU’s positions on proposed federal legislation including this very issue. Murphy’s failure to object to Airbnb’s ongoing use of arbitration clauses, which similarly eliminate both procedural safeguards and substantive rights for historically-disadvantaged groups, is particularly striking in the context of the ACLU positions she previously led.
Airbnb’s other consultant-advisors have similarly taken positions against compulsory arbitration. Consider Eric Holder, former US Attorney General, now a partner at the prestigious law firm Covington & Burling. Under Holder’s leadership, the US Department of Justice repeatedly opposed compulsory arbitration, including filing a Supreme Court amicus brief critiquing American Express’s attempt to impose arbitration on merchants. DOJ there argued that "the practical effect of [the arbitration agreement] would be to foreclose [merchants] from effectively vindicating their Sherman Act [antitrust] claims." DOJ went on to explain that the arbitration agreement makes an "impermissible prospective waiver" of unknown claims, and DOJ noted that private enforcement of federal statutes is important to the overall regulatory scheme—an objective that would be undermined if parties could be forced to effectively waive their claims through compulsory arbitration. Holder’s failure to object to Airbnb’s ongoing use of arbitration clauses, similarly designed to escape federal claims that cannot otherwise be pursued, is a sharp change from the DOJ positions he previously oversaw. I credit that Murphy is the sole author, and Holder and Airbnb’s other consult-advisors have taken no public position to endorse the report or Airbnb’s approach. But when Airbnb’s consultant-advisors allow Airbnb to use their names and credentials, both in the report body and in repeated statements to the press, they necesarily lend their reputations to the company’s approach.
Facing scrutiny of its arbitration provisions in June 2016, Airbnb told the New York Times that "these [arbitration] provisions are common." Certainly many companies require that customers arbitrate their disputes. But Airbnb’s service raises persistent and widespread concerns about discrimination (among other issues). Even if arbitration were appropriate for credit cards and cell phone plans (which, to be sure, many consumer advocates dispute), it may not be appropriate for questions of race, equality, and justice. Moreover, as Airbnb seeks public approval for its anti-discrimination efforts, it ought not reject the standard dispute resolution procedures provided by law. It is particularly galling to see Airbnb’s report totally silent on dispute resolution despite prior discussion in public discussions and the press. Airbnb should remove its arbitration clause, if not for all disputes, then at least for claims of discrimination.
Airbnb’s insistence that consumers arbitrate, without the benefit of courts or court procedures, is a stark contrast to Airbnb’s approach to protect its own interests. Airbnb does not hesitate to file lawsuits when lawsuits are in the company’s interest. Most notably, Airbnb recently sued San Francisco, Santa Monica, and Anaheim over laws it disliked. Whatever the merits of Airbnb’s claims (and on that point, see my July critique with Nancy Leong), Airbnb is happy to take its preferred disputes to court—while specifically prohibiting consumers from doing so.
Testing and data
Airbnb says fixing discrimination is a "top priority," and this month’s report repeatedly echoes that claim. In that context, one might expect the company to welcome academic research to help investigate. Instead, Airbnb specifically bans it.
Consider the limits of research to date. My 2015 paper (with Mike Luca and Dan Svirsky) analyzes experiences of rookie Airbnb guests in five cities. Much is left to be studied. How about outcomes in other cities? What happens when a guest gets a favorable review from a prior host? Do hosts tend to prefer a white rookie guest with no reviews, or a black guest with a single five-star review? How about guests who have verified their Airbnb credentials by linking Facebook and LinkedIn accounts or completing other profile verifications? Do outcomes change after Airbnb’s September email to users and (planned) November policy change? Via the same methodology demonstrated in our paper, other researchers could test these questions and more. But Airbnb specifically prohibits such research via Terms of Service provisions. For one, Airbnb disallows the use of software to study its site (TOS section 14.2) looking for patterns that indicate discrimination. Moreover, Airbnb specifically prohibits creating multiple accounts (14.14), an approach widely used (by us and others) to compare the way hosts respond to guests of varying race.
These problems have a particularly clear solution. Airbnb should revise its Terms of Service to allow bona fide testing.
Airbnb’s report also offers a series of claims grounded in data ("The company’s analysis has found ", "Airbnb’s research and data show ") as well as promises to collect additional data and run additional analyses. But Airbnb asks the public to accept its analyses and conclusions without access to the data supporting its conclusions. Airbnb should offer more to counter skepticism, particularly after widely-discussed allegations of misleading or incomplete data. Certainly Airbnb could provide the interested public with aggregate data measuring discrimination and showing the differential outcomes experienced by white versus black users. If Airbnb now has mechanisms to measure discrimination internally, as the report suggests, it’s all the more important that the company explain its approach and detail its methodology and numerical findings—so past outcomes can be compared with future measurements.
Airbnb’s response in context
In my June article proposing methods to prevent discrimination at Airbnb, I called for concealing guest photos when guests apply to hosts, similarly concealing guest names, normalizing dispute resolution, and allowing testing. I didn’t expect Airbnb to do all of this. But I was disappointed that Airbnb’s response discusses only the first of these four changes, and even that only superficially. Based on Airbnb’s promise of a "comprehensive review," I hoped for more.
Airbnb argues that "there is no single solution" to discrimination and that "no one product change, policy or modification can eliminate bias and discrimination." Certainly one might imagine multiple policies that would help make a difference, and the combination of multiple policies might be more effective than a single policy alone. But temporarily concealing photos and names, as guests apply to hosts, is the simplest and most promising solution by far. The bar is high for Airbnb to reject this natural and well-established approach; Airbnb’s report offers little to convince a skeptical reader that appropriate concealment, so widely used in other contexts, would not work at Airbnb. Nor does Airbnb’s report make any serious effort to establish that Airbnb’s alternatives will be effective. In both these respects, the concerned public should demand more.
Since its launch in 2007, Android has become the dominant mobile device operating system worldwide. In light of this commercial success and certain disputed business practices, Android has come under substantial attention from competition authorities. In a paper Damien Geradin and I posted this week, we present key aspects of Google’s strategy in mobile, focusing on Android-related practices that may have exclusionary effects. We then assess Google’s practices under competition law and, where appropriate, suggest remedies to right the violations we uncover.
Many of Google’s key practices in mobile are implemented through Mobile Application Distribution Agreements, confidential contracts that became available to the public through Oracle litigation and are available, to this day, only on my site. But we also evaluate Google restrictions embodied in other documents including Google’s Anti-Fragmentation Agreement as well as supplemental contracts with device manufacturers and mobile carriers providing for exclusive preinstallation of Google search.
If one accepts our conclusion that certain Google practices violate competition laws, it’s important to turn to the question of remedies–what changes Google must make. The natural starting point is to end Google’s contractual ties, allowing device manufacturers to install Google apps in whatever configurations they find convenient and in whatever way they believe the market will value. One might expect to see low-cost devices that feature Yahoo Search, MapQuest maps, and other apps that vendors are willing to pay to distribute. Other developers would retain a “pure Google” experience, foregoing such payments from competing app makers but offering apps from a single vendor, which some users may prefer.
Beyond that, remedies might seek to affirmatively restore competition. Because much of Google’s dominance in mobile seems to come from its powerful app store, Google Play, an intervention might seek to shore up other app stores–for example, letting them copy in Google’s APK’s so that they can offer Google apps to users who so choose. A full remedy would also attempt to restore competition for key apps. Just as Europe previously required Microsoft to show a screen promoting five different web browsers when a user booted Windows for the first time, a similar screen could provide users with a genuine choice of Android apps in each area where Google has favored its own offering. We suspect some users would favor a more privacy-protecting location service if that were prominent and easily available. Other users would probably find competing local services, such as TripAdvisor and Yelp, more trustworthy than Google’s offerings. These developments would increase choices for both users and advertisers, reduce the sphere of Google’s dominance, and begin to restore a competitive marketplace in fundamental mobile apps.
Our working paper:
Android and Competition Law: Exploring and Assessing Google’s Practices in Mobile
(Updated October 26, 2016: This article, as revised, is forthcoming in the European Competition Journal.)
Last week the Internet buzzed with news of Airbnb’s lawsuit against San Francisco. Dissatisfied with a new ordinance updating and enforcing 2014 regulations of short-term rentals, Airbnb filed suit against the city, arguing that the new ordinance violated both federal law and the federal constitution.
In today’s piece, Nancy Leong and I assess Airbnb’s arguments in its San Francisco complaint — finding some validity but, on the whole, considerable weakness.
Assessing Airbnb’s Prospects in its San Francisco Litigation – Yale Journal of Regulation – Notice & Comment