Well, friends, the gloves appear to be off. Airbnb, the San Francisco-based vacation rental company that spent over eight million dollars to convince city voters to oppose regulations for their industry, took out a passive aggressive ad campaign bragging over the taxes they had to be forced into paying, and has itself admitted that a significant percentage of its SF rentals violate local laws is now suing its home city, after the Board of Supervisors unanimously agreed to bounce their law-breaking listings or face fines.
Given all the stuff I just linked to above, we could have guessed this was coming: When earlier this month SF's Supes passed the legislation requiring Airbnb (and other, similar platform) listers to comply with city law or face fines of up to $1000 per day per illegal listing, the company ominously responded that "we are considering all options to stand up for our community and keep fighting for real reform." About a week later, the company argued on their site that San Francisco shouldn't require people who rent their homes out via the platform to follow the same business licensing requirements that every other business in the city must, because "the process is too complicated." And now, according to a statement posted on their website, the company is suing San Francisco, saying that the new legislation holding Airbnb responsible if their hosts fail to comply with local regulations "violates important federal laws that protect privacy and innovation on the internet."
According to Airbnb, "Since 1996, the Communications Decency Act...has prevented local governments from holding websites responsible for content published by their users as the city is attempting to do here." In addition, Airbnb claims that "The new law also violates the federal Stored Communications Act, which creates uniform privacy protections for internet users and prevents cities from simply demanding that platforms turn over user information without a subpoena or other legal process."
Airbnb also claims that the law is a violation of the company's First Amendment rights, as “It is a content-based restriction on advertising rental listings, which is speech."
These are arguments that the city has been bracing for since the proposal to fine Airbnb for unregistered SF listings was made back in April. At the time, one of the Supes proposing the new law, Aaron Peskin, said that the legislation was "crafted in a narrow manner that will survive legal challenges,” and in June Deputy City Attorney Jon Givner said that “This ordinance does not regulate the content of any posted information on the website of a hosting platform."
As of Monday evening, the city is standing firm in that assessment, with City Attorney spokesperson Matt Dorsey saying in an emailed statement that "Nothing in San Francisco's pending ordinance punishes hosting platforms for their users' content. In fact, it's not regulating user content at all - it's regulating the business activity of the hosting platform itself."
"San Francisco requires hosting platforms to facilitate tax collection," Dorsey says, "and to verify that tourist rental hosts are properly licensed. It's simply a duty to verify information that's already required of a regulated business activity."
On the news of the lawsuit, city officials defended the legislation, which would require Airbnb to ensure that all 9,448 (or so) of its San Francisco hosts follow the year-old laws requiring them to register with the city. (At present, only about 1,650 of Airbnb's current SF hosts are in compliance with the law, making as many as 75 percent of Airbnb's SF listings in violation.)
“We passed the law because we thought it was a reasonable approach to improve enforcement,” Supervisor Scott Wiener told the Chron.
But it's that enforcement that Airbnb appears to be trying to avoid, as they argue in their court filing that the company will suffer “irreparable” damage to their business “if it is forced to remove immediately thousands of listings from its website."
“Given the substantial criminal and civil penalties for non-compliance," Airbnb wrote in their filing, "and the burdensome verification process, hosting platforms like Airbnb likely would over-remove or not publish lawful and registered listings."
According to Kevin Guy, director of the city’s Office of Short Term Rentals, it's not that the "burdensome" nature of the verification process that's keeping hosts from registering, it's that there's a verification process at all. “A fair number of the folks who are not registered knew they wouldn’t qualify," Guy told the Chron, which noted that the city has "already streamlined registration," as "business registrations can now can be done online. Appointments for the required in-person meeting with his office can be booked online, and more-flexible times, such as evening hours, have been added."
But according to Supervisor David Campos, there's not enough streamlining in the world to make Airbnb happy, as the company "doesn’t really want to work with the city,” he told the Ex.
“Its view of the world is ‘our way or the highway.’”
The new law is scheduled to take effect on July 27, but the US District Court for the Northern District of California, where the case was filed Monday, typically hears cases about 35 days after they're filed. That would mean a court date in August, after the law has kicked in. According to Airbnb, they're seeking an "accelerated" hearing, but no ruling has been made regarding that request as yet.
But in the end, Campos says, San Francisco will triumph over Airbnb. The company's refusal to simply comply with SF law, Campos tells the Ex, is "disappointing but not surprising," but “We’re confident in the end we will prevail.”