Airbnb Inc. filed a lawsuit against its home city of San Francisco on Monday in an attempt to block new regulation that it said would violate federal protections for Internet companies.
The short-term property rental company slammed the city's new ordinance, which would require Airbnb and similar firms such as VRBO and HomeAway to make sure that hosts register with the city or face a fine.
Under the law, which passed with a 10-0 vote by the city's Board of Supervisors earlier this month, companies would be fined $1,000 for every unregistered host who rents property on their platform.
Airbnb challenged the regulation in its complaint and also filed to have a preliminary injunction placed on the ordinance, which will take effect later this month.
In its filing in the U.S. District Court in San Francisco, Airbnb said the city's regulation violates the Communications Decency Act of 1996, the Stored Communications Act and the company's 1st Amendment rights.
"It is a content-based restriction on advertising rental listings, which is speech," the company said. "These provisions squarely violate the CDA, which prohibits 'treat[ing]' websites who host or distribute third-party content, like the Hosting Platforms at issue here, 'as the publisher or speaker of any information provided by another information content provider,' and immunizes them from liability under any 'inconsistent' state or local law."
The office of San Francisco City Atty. Dennis Herrera said nothing in the ordinance punishes hosting platforms for their users' content.
"In fact, it's not regulating user content at all," Andrea Guzman, spokeswoman for the city attorney's office, said in a prepared statement. "It's regulating the business activity of the hosting platform itself.
"The Communications Decency Act doesn't render all business laws moot simply because a business happens to operate on the Internet."
In a statement published on its website, Airbnb said the new ordinance was "flawed," and the firm is now forced to ask the federal court to intervene.
"This is an unprecedented step for Airbnb," the company said, "and one we do not take lightly, but we believe it's the best way to protect our community of hosts and guests."
The ordinance comes after San Francisco's Office of Short-Term Rentals has faced criticism for failing to enforce existing laws intended to curb the effect of short-term rentals on the city's tight housing market. Of the estimated 9,000 short-term rentals in San Francisco, only 1,650 or so have registered with the city.
The legal action comes as Los Angeles is weighing similar rules that would impose fines on Airbnb and other websites for advertising rentals that fail to register with the city. Under the Los Angeles proposal, the online platforms also could be fined for refusing to turn over the addresses of rentals that neglected to register.
L.A. housing and neighborhood activists who have called for stiffer regulation of such rentals say the websites must help the city enforce its rules. But the plan has drawn sharp criticism from tech industry groups such as the Internet Assn., which have argued that forcing platforms such as Airbnb to monitor their rental listings would flout federal law — the same objections that Airbnb is raising about the San Francisco rules.
L.A.'s Planning Commission, whose members are appointed by Mayor Eric Garcetti, voted narrowly to back the proposed rules last week after a lengthy hearing packed with hundreds of rental hosts, housing advocates, hotel workers and neighborhood activists. The proposed regulations still must be approved by the City Council.
"At the Planning Commission, we rely on the city attorney and the planning staff to make sure that we follow all laws and the actions we take are reflective of that advice," commission President David Ambroz said early Tuesday, after hearing about the San Francisco suit. "I feel confident that we were given the best advice possible, and we took actions accordingly."
City Councilman Mike Bonin, who has pushed for the new L.A. regulations, argued that Airbnb and similar companies should be held responsible for advertising illegal listings.
"If a clerk at 7-Eleven can be fined for selling alcohol to someone who does not have a proper ID, certainly a multibillion-dollar corporation can be fined for facilitating and profiting from an illegal advertisement," Bonin said in a statement Tuesday. "Instead of fighting tooth and nail to avoid responsibility, Airbnb should help make sure their site is not being abused in ways that threaten the character and quality of our neighborhoods."
Airbnb is one of the most valuable tech startups in the world, with a valuation of $25.5 billion.
The company and its competitors have developed increasingly conflicted relationships in cities such as San Francisco and Los Angeles, where they are lauded by travelers looking for lodging and hosts seeking additional revenue streams but reviled by some local residents for driving up already high costs of living and displacing tenants.
10:29 a.m.: This article was updated with comment from Los Angeles City Councilman Mike Bonin
9:47 a.m.: This article was updated with comments from the office of the San Francisco city attorney.
9:11 a.m. June 28: This article was updated with comments from Los Angeles Planning Commission President David Ambroz.