Airbnb sues San Francisco over new rental law as tensions rise
Airbnb has sued its hometown, San Francisco, in a federal court in the hope of blocking the city’s plan to fine the company over unregistered rentals. In the complaint, which was filed yesterday, Airbnb claims San Francisco is violating federal law by passing and enforcing a new law that holds short-term rental companies accountable for any listing that hasn't been registered with the city. Airbnb is seeking an injunction to prevent the city from removing listings and from fining Airbnb for each unregistered accommodation. This is the first time Airbnb has sued any of the 34,000 cities in which it operates, and must be seen as a clear sign of the growing tensions between the company and the city where it was founded less than a decade ago.

Airbnb has filed a lawsuit against its hometown of San Francisco to block changes to a city rental law that would require the startup to remove hosts who haven't registered with the government.

The amendment, which goes into effect next month, requires short-term rental companies to remove listings from their websites that lack the city's required registration number. Failure to do so could open up companies such as Airbnb and VRBO to thousands of dollars in fines and criminal charges.

In its lawsuit, filed in US District Court for Northern California, Airbnb claims the new amendment violates federal laws, including the Communications Decency Act, the Stored Communications Act and the First Amendment.

"While we have attempted to work with the city on sensible, lawful alternatives to this flawed new ordinance, we regret that we are forced to now ask a federal court to intervene in this matter," the company said Monday in a blog post. "This is an unprecedented step for Airbnb, and one we do not take lightly, but we believe it's the best way to protect our community of hosts and guests."

A representative for San Francisco's city attorney said he hadn't seen the lawsuit but said the listing verification requirement was nothing unusual, comparing it to regulations that require vendors of alcohol and cigarettes to verify the age of the customer before making a sale.

"Nothing in San Francisco's pending ordinance punishes hosting platforms for their users' content," Matt Dorsey, press secretary for the City Attorney's Office, said in a statement to CNET. "In fact, it's not regulating user content at all -- it's regulating the business activity of the hosting platform itself."

This lawsuit highlights growing pains that are spreading across the on-demand and sharing economy, which create peer-to-peer marketplaces via online services and apps. Uber, an app that pairs passengers with drivers, settled two class action lawsuits in April that will let its drivers remain classified as independent contractors. Several other on-demand startups are facing similar lawsuits. Some, such as house-cleaning startup Homejoy, have shut down.

San Francisco officially legalized peer-to-peer home sharing back in 2014, but some city officials and residents have since tried to tighten the rules. Critics have accused Airbnb of contributing to tighter housing markets, with landlords taking rental units off the market to capitalize on short-term rentals instead.

The amendment, approved earlier this month in a 10-0 vote by the city's Board of Supervisors, does not change requirements for hosts in San Francisco. However, over 75 percent of the more than 7,000 Airbnb hosts in San Francisco are not registered, as required, and continue to list on the site, according to San Francisco Supervisor David Campos.

Airbnb has promised to do its own crackdown of illegal listings. In April, the company said it was investigating hosts in San Francisco with multiple listings and plans to give "unwelcome commercial operators" the boot.