Airbnb in Talks with State and New York City to Settle Lawsuit

Airbnb is in talks with New York officials about settling the lawsuit Airbnb filed after Gov. Andrew Cuomo passed a law targeting “hosts” with illegal listings with up to $7,500 in fines. Airbnb sued the city and New York State just hours after Cuomo signed the bill into law in October. A federal judge postponed a meeting scheduled to discuss Airbnb’s suit, saying the two sides are talking about a potential resolution.

Airbnb has acknowledged that some activity on its site breaks these laws, but it objected to the new framework for enforcing them. Airbnb sued on the grounds that the law violated the First Amendment because it punished speech related to illegal activity, rather than the activity itself. In Airbnb’s complaint, the company noted that if the new law targeted the Airbnb website, it would violate the 1996 Communications Decency Act, which protects Internet publishers from third-party content posted to their sites.

Assemblywoman Linda Rosenthal, who sponsored the bill in the assembly, said the state never intended to punish Airbnb. But the actual enforcement falls to the city. The mayor’s Office of Special Enforcement is tasked with enforcement, but it has faced obstacles. After the agency receives a complaint, it must travel to the apartment in question and identify a tourist staying there. Last summer, in an acknowledgement that it was having difficulty getting results, the city nearly doubled its budget to $2.8 million and added 17 additional staff members.