Why Airbnb Will Probably Win Legal Fight Against San Francisco

San Francisco has picked a fight with Airbnb that it probably cant win.

On Monday, the home-rental business filed a lawsuit against its hometown, saying that San Franciscos attempt to get Airbnb to help enforce its housing law is illegal. Airbnb has reluctantly gone along with the citys efforts to regulate the short-term rental market. As it stands, people can rent out their apartments with some restrictions, but they must also register with the city. Enforcing this law has been tricky, so the citys Board of Supervisors recently passed an update saying websites like Airbnb can be punished if the people listing homes on their sites havent registered with the city.

Starting next month, Airbnb will face fines of up to $1,000 per day for each unverified listing, and its employees could also face jail day. But it seems unlikely to get that far, according to many attorneys who follow internet law. Websites like Airbnb have immensely broad protections against attempts to hold them liable for the actions of their users. Airbnbs suit cites segment 230 of the Communications Decency Act, widely considered the most revered law among internet companies. Its the legal protection that holds Google from being held responsible for the actions of websites its search engine points to and that lets eBay and Amazon operate expansive marketplaces where they dont have complete control over the vendors utilizing their sites.

While Airbnb sets some rules over the people who use its website, the company is allowed to push pretty much all legal liability onto the users themselves. Imagine if a nation or city necessitated eBay to verify that its vendors had the appropriate local business license, said Eric Goldman, a professor at Santa Clara University School of Law, and an expert in online legal issues. That would be an indirect, but very clear, restriction on eBays abilities to accept listings, and I think thats what Section 230 precludes.

The law explicitly excluded copyright violation and federal criminal liability from its purview. Other than that, its pretty much open season. Courts have repeatedly sided with companies in Airbnbs position, including websites whose users sold fake autographed athletics souvenirs, defamed other users and posted sexually explicit photographs of minors.

One notable case where a website went too far involved specific features on Roommates.com, where people created personal profiles by selecting their gender and race from a series of dropdown menus, then letting people to filter out, say, black females. Asking such questions transgresses federal anti-discrimination statutes, and a court found that Roommates.com basically forced people into an illegal situation. But this exception is basically an illustration of how far the law goes, said Clay Calvert, the director of the Marion B. Brechner First Amendment Project at the University of Florida. You have to actually show that it requires you to do something illegal, he said.

In a blog post, Airbnb referred to the law as the linchpin of the vibrant and successful internet we know today. By all accounts, San Francisco will face a challenging road persuading a judge that its new policy doesnt run afoul of the rule.

This doesnt necessarily mean that local statutes aren’t a big problem for Airbnb. Its users can still be punished, and Airbnb says that the city has already levied about $700,000 in fines against its hosts. At some point, such penalties could have a chilling impact that injuries the entire Airbnb economy. On the same day the company filed its suit in San Francisco, Airbnb sent an e-mail to users in New York urging them to pressure Governor Andrew Cuomo into vetoing a statute that would punish hosts in that nation. But for now, the company suggests that San Francisco continues to go after users who arent complying. Instead of penalise Airbnb for publishing unlawful listings, the city could enforce its short-term rental statute immediately against hosts who violate it, Airbnb says in its suit.

Airbnb left that part out of its blog post.

Read more: www.bloomberg.com

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