Judge questions Airbnb stance on San Francisco rental law

SAN FRANCISCO (Reuters) - A U.S. judge expressed skepticism toward a bid by Airbnb to halt a San Francisco law that imposes fines on home rental companies for processing bookings by hosts not registered with the city.

A 3D printed people's models are seen in front of a displayed Airbnb logo in this illustration taken, June 8, 2016. REUTERS/Dado Ruvic/Illustration

The case pits San Francisco leaders against Airbnb and other allies in the tech industry in the midst of a housing crisis in the city. Local officials want to maximize tax collection on rental units, while tech advocates say internet firms should not be hamstrung by myriad local rules on what they can publish.

At a hearing in San Francisco federal court on Thursday, U.S. District Judge James Donato said he was “concerned” with Airbnb’s position because the San Francisco statute targets only bookings processed by Airbnb, not what the company publishes on its website.

“I’m just struggling with understanding how this ordinance inherently requires me as a district court to treat your client as a publisher,” Donato said.

The San Francisco ordinance requires Airbnb and similar services to verify that people booking short-term rentals on their sites have registered with the city. The services would face fines of $1,000 each time they process a booking from an unregistered host.

Airbnb attorney Jonathan Blavin said even though the statute deals with bookings, it would still force Airbnb to screen the listings it publishes.

In its lawsuit, Airbnb said it was protected by the federal Communications Decency Act and cannot be held responsible for ensuring hosts have complied with the city’s rules. Airbnb has asked for a court injunction prohibiting the ordinance from taking effect.

The Communications Decency Act, passed in 1996, was intended to protect free speech online and has since become a favorite shield for social media and e-commerce sites against a variety of lawsuits. Recently, however, some judges have pushed back on broad interpretations of the law.

Donato expressed concern about how Airbnb could comply with the ordinance without disrupting its business, and asked an attorney for San Francisco if the city would be willing to delay the ordinance until it developed an automated system for Airbnb to verify host registrations quickly.

City attorney Sara Eisenberg said she was not authorized to agree to such a delay. She suggested that Airbnb could adopt a system similar to Uber, which requires its drivers to upload a copy of their drivers license before being allowed to operate on the ride hailing platform.

Editing by Matthew Lewis