Airbnb files federal suit against Governor Cuomo’s $7,500 fines on illegal listings

Posted On Mon, October 24, 2016 By

Posted On Mon, October 24, 2016 By In Policy

Back in June, the NYC legislature passed a bill that would impose fines of up to $7,500 on those offering illegal short-term Airbnb rentals, and at the end of last week, Governor Cuomo signed the bill into effect, reports the Times. The new regulation piggybacks on what’s been the state law since 2010–that apartments can’t be rented out for less than 30 days if the lease holder isn’t present. Despite the fact that a recent report estimates 56 percent of the site’s 2015 listings fell into this category, Airbnb is taking aim against the Governor, filing a federal lawsuit that says the new law “would impose significant immediate burdens and irreparable harm on Airbnb.”


At first it seemed as though Airbnb was willing to work the state; only a couple weeks after the initial legislation was announced, they pulled 2,233 NYC listings from the site that may have been illegal under the law. But a few weeks later, a group of their investors, including Ashton Kutcher, drafted a letter asking Cuomo to veto the bill, and during the Democratic National Convention they ran ads in Philadelphia cabs with the same message.

According to the Times, “the company contends that the law violates the company’s constitutional rights to free speech and due process, as well as the protection it is afforded under the Communications Decency Act, a federal law that says websites cannot be held accountable for content published by their users.” State lawmakers say that took the Act into consideration, hence why the fines are imposed on the hosts and not the company. However, in their complaint, the $30 billion San Francisco-based startup contends that “in order to be assured of avoiding liability, including potential criminal prosecution, Airbnb would be required to screen and review every listing a host seeks to publish.” As an alternative, the company offered to provide a registry of hosts who are running illegal hotels, making it easier to enforce current rules.


[Via NYT]

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