Airbnb Drops Challenge To New York Advertising Law

Home sharing company Airbnb has dropped its attempt to block a New York state law that imposes fines of up to $7,500 on people who post ads for illegal rentals.

Airbnb's move came after New York State Attorney General Eric Schneiderman agreed that he wouldn't seek to hold Airbnb liable for violations of the law, according to court papers filed Tuesday.

The law, signed last month by New York Governor Andrew Cuomo, gives new teeth to a 2010 measure that prohibits New York City residents from renting apartments for fewer than 30 days, unless the host is present. In the past, landlords and other apartment owners -- but not renters -- risked fines for violating the short-term rental prohibition.

Airbnb alleged in a complaint filed last month in U.S. District Court in Manhattan that the New York law violates the federal Communications Decency Act, which immunizes Web sites from liability based on unlawful activity by users. The company contended that the law's wording created an ambiguity about whether intermediaries like itself would be liable for ads for illegal rentals.

Airbnb is still fighting other local laws, including a San Francisco measure that makes it a crime for home-sharing sites to collect booking fees for units that haven't been registered with the city. Airbnb says the San Francisco law would require the company to police the listings on its site -- a requirement that Airbnb says violates the federal Communications Decency Act. That law, dating to 1996, broadly protects Web platforms from responsibility for users' activity.

U.S. District Court Judge Donato in the Northern District of California rejected Airbnb's argument on that point. But late last week Donato temporarily prohibited San Francisco from attempting to enforce the law, due to concerns over whether Airbnb has an effective means of verifying whether apartments have been registered with the city.

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