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<title>Techdirt. Stories filed under &quot;rental&quot;</title>
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<pubDate>Tue, 21 May 2013 13:04:00 PDT</pubDate>
<title>NYC Says Renting Out Your Place Via Airbnb Is Running An Illegal Hotel</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130521/12175523157/nyc-says-renting-out-your-place-via-airbnb-is-running-illegal-hotel.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130521/12175523157/nyc-says-renting-out-your-place-via-airbnb-is-running-illegal-hotel.shtml</guid>
<description><![CDATA[ We've seen this over and over again: new and innovative startups enter a market in a creative and compelling way, and a combination of incumbents and regulators get in the way of something cool happening.  Perhaps the most well known recent example of this is with <a href="http://www.techdirt.com/blog/?company=uber">Uber</a>, but probably a close second is Airbnb.  Airbnb is the immensely popular system for letting people rent out their homes/apartments/spare rooms to willing guests for (usually) short stays.  Completely coincidentally, just this morning, I tried Airbnb for the very first time, trying to book a stay in Manhattan for an upcoming trip.  And... soon after I submitted my request, I saw this report that officials in New York City have <a href="http://news.cnet.com/8301-1023_3-57585377-93/ny-official-airbnb-stay-illegal-host-fined-%242400/" target="_blank">deemed Airbnb to violate the city's "illegal hotel law."</a>  Basically, they're arguing that people renting out their homes are running illegal hotels.  They originally asked the guy who rented his condo out to pay $7,000 for both violating that law and for zoning and building code violations, but then dropped the latter part, and lowered the fine to $2,400 for just the hotel part.
<br /><br />
Of course, laws like the illegal hotel law are supposed to be about public safety, and to maintain certain health and safety standards.  But, the reality is that, like so much regulation these days, it's turned into a way to <a href="http://www.techdirt.com/articles/20120627/00031719500/why-you-cant-braid-someones-hair-utah-money-without-first-paying-16k.shtml">keep competition out</a>.  Laws to protect hotel visitors certainly made some amount of sense in the past, but most of the reasons why they're in place don't necessarily apply to the way Airbnb functions.  Because we can now share information pretty easily, Airbnb's detailed review system and communication process take away most of the "risk" that necessitated a health and safety law.
<br /><br />
Just as an example, in my own search for a place to stay, I went through about half a dozen different apartments that were available, and looked over the pictures and carefully read the reviews.  I immediately discounted the cheapest one, because multiple reviews mentioned that the apartment had not been cleaned prior to them showing up.  Information and the sharing of information made that place undesirable just like that.  No laws needed.  I also emailed back and forth with a few other apartment/condo owners to find out some details about their places, before finally selecting one that worked for me.  Honestly, the experience has been awesome so far, giving me much greater choice, and the likelihood of a much nicer stay than in a hotel.
<br /><br />
The new ruling doesn't suddenly make Airbnb itself "illegal," but does suggest that if the city finds out that you're using the service, you could face stiff fines.  At the heart of the issue is a really stupid law that was basically designed to make Airbnb impossible: it says you <a href="http://www.crainsnewyork.com/article/20130512/TECHNOLOGY/305129987" target="_blankl">can't rent out your place for less than 29 days</a>.  The only purpose of this law is to protect hotels from competition.  The backer of the law claims that it was really about landlords illegally converting residential buildings into hotels, but if that was the case, they should have made the bill a lot clearer, because it's being used to punish this Airbnb user.  Airbnb, which tried to intervene in the case, is (quite reasonably) disappointed:
<blockquote><i>
This decision runs contrary to the stated intention and the plain text of New York law, so obviously we are disappointed. But more importantly, this decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes. There is universal agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials. It is time to fix this law and protect hosts who occasionally rent out their own homes. Eighty-seven percent of Airbnb hosts in New York list just a home they live in -- they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law.
</i></blockquote>
As the reports note, this doesn't mean that the city will now be going after the tens of thousands of residents who rent their places out on Airbnb, but if complaints are filed, it can go after them.  Hopefully, this doesn't scare off the person whose house I just requested... But, more importantly, this shows, yet again, why bad regulations can do serious harm to innovation, often while serving to protect less innovative incumbents.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130521/12175523157/nyc-says-renting-out-your-place-via-airbnb-is-running-illegal-hotel.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130521/12175523157/nyc-says-renting-out-your-place-via-airbnb-is-running-illegal-hotel.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130521/12175523157/nyc-says-renting-out-your-place-via-airbnb-is-running-illegal-hotel.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>stifling-innovation</slash:department>
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<pubDate>Thu, 5 May 2011 11:11:00 PDT</pubDate>
<title>Laptop Rental Provider Sued For Spying On Renters Via Surreptitious Webcam Software</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110505/00424214164/laptop-rental-provider-sued-spying-renters-via-surreptitious-webcam-software.shtml</link>
<guid>http://www.techdirt.com/articles/20110505/00424214164/laptop-rental-provider-sued-spying-renters-via-surreptitious-webcam-software.shtml</guid>
<description><![CDATA[ You would think after last year's attention-grabbing lawsuit about the Lower Merion School district using some surreptitious monitoring software to activate webcams and <a href="http://www.techdirt.com/articles/20100218/1056378228.shtml">snap photos</a> of kids at home that others would be a lot more careful about their use of such software.  After all, the school district ended up having to <a href="http://www.techdirt.com/articles/20101012/10365311390/spying-school-district-pays-out-610-000-to-settle-lawsuit-mostly-to-the-lawyers.shtml">pay out $610,000</a> to settle the lawsuit filed against it.
<br /><br />
However, in a similar story, a Wisconsin couple has apparently <a href="http://www.pcworld.com/article/227031/renttoown_pcs_watch_their_users_via_webcam.html" target="_blank">sued Aaron's Inc. for spying on them</a>.  Aaron's is a giant "rent-to-own" retailer, offering furniture, electronics and computers on a rent-to-own basis.  In this case, the couple had rented a Dell laptop from the company, and later discovered that it had sneaky monitoring software on it which they were unaware of... but which was used to turn on the laptop's webcam and take pictures of the family without them knowing about it.
<br /><br />
The only way they found out was that a store manager came to take back the computer, incorrectly believing the couple had not paid their bill (they had).  When he showed up, he showed them a photo he had, which was taken from the webcam, which (understandably) freaked out the couple.  They asked him how he got the photo, and his response was that he <i>wasn't supposed to show them the photo</i>.  Well, that's comforting.  Apparently, the product that was used to do this monitoring was <a href="http://news.yahoo.com/s/ap/20110503/ap_on_hi_te/us_rental_computer_spyware" target="_blank"><i>hardware based</i></a> as well, meaning that it couldn't be detected or turned off via software.
<br /><br />
The couple and their lawyers are seeking to turn this into a class action for all renters of computers from Aaron's that have this tracking technology.  Also, the couple contacted the police, who apparently still have the computer, so I guess there's at least some review of whether or not this is a criminal matter.  The AP article (linked in the paragraph above) has a short discussion on whether or not this effort violated either ECPA or the CFAA:
<blockquote><i>
Two attorneys who are experts on the relevant computer privacy laws, the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act, said it's difficult to tell if either was broken, though both agree the company went too far.
<br /><br />
Peter Swire, an Ohio State professor, said using a software "kill switch" is legal because companies can protect themselves from fraud and other crimes.
<br /><br />
"But this action sounds like it's stretching the self-defense exception pretty far," Swire said, because the software "was gathering lots of data that isn't needed for self-protection."
<br /><br />
Further, Swire said the Computer Fraud and Abuse Act "prohibits unauthorized access to my computer over the Internet. The renter here didn't authorize this kind of access."
<br /><br />
Fred Cate, an information law professor at Indiana University agrees that consent is required but said the real question might be: "Whose consent?"
</i></blockquote>
It's no secret that both ECPA and CFAA have their problems, but it seems like this might be the type of case that those laws were more designed to cover -- though, that definitely depends on some of the details which haven't come out yet.<br /><br /><a href="http://www.techdirt.com/articles/20110505/00424214164/laptop-rental-provider-sued-spying-renters-via-surreptitious-webcam-software.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110505/00424214164/laptop-rental-provider-sued-spying-renters-via-surreptitious-webcam-software.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110505/00424214164/laptop-rental-provider-sued-spying-renters-via-surreptitious-webcam-software.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>this-again?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110505/00424214164</wfw:commentRss>
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<pubDate>Tue, 20 Oct 2009 16:07:42 PDT</pubDate>
<title>Looking At The Redbox Antitrust Fight</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091019/0403026583.shtml</link>
<guid>http://www.techdirt.com/articles/20091019/0403026583.shtml</guid>
<description><![CDATA[ Law.com has a nice article <a href="http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202434676820&#038;rss=nlj&#038;slreturn=1&#038;hbxlogin=1" target="_blank">detailing the legal issues involved in the battles between Redbox and the various movie studios</a>.  The main question is whether or not it's an antitrust violation on the part of the studios to block distributors, wholesalers and retailers from selling DVDs to Redbox.  The studios want (a) a revenue share from Redbox (b) Redbox not to offer new release DVD movies for rental and (c) Redbox not to sell used DVDs.  The reasons are pretty obvious: Redbox is a much more competitive offering.  Since it's a lot less labor intensive, it's able to offer the DVDs for much less (both rental and sale), and the movie studios are freaking out, because in their minds, their old revenue streams should never be allowed to decrease.
<br /><br />
The statements from the studios on the dispute is incredibly disingenuous:
<blockquote><i>
"The real complaint is Fox won't sell DVDs to Redbox on the terms Redbox demands, and that is not in our view an antitrust violation," said Watson, an antitrust expert who has teamed with Yosef Riemer, a litigation partner in Kirkland &#038; Ellis' New York office, in representing Fox, part of News Corp.'s Fox Filmed Entertainment. "There's nothing in the law, antitrust or otherwise, that says a seller must sell its product at the price that the buyer demands on the date the buyer demands and through the distribution channel that the buyer demands."
</i></blockquote>
Indeed, Watson is correct that no seller needs to offer the product at the price the buyer demands, but that's <b>not</b> what's being disputed here at all.  Clearly, prior to Fox and some of the other studios throwing their hissy fit, the <i>distributors</i> had <b>no problem</b> selling DVDs to Redbox at the prices Redbox thought were reasonable.  The studios sold the movies to the distributors at the usual price, and the distributors sold them to Redbox at the usual price.  Everyone should be happy.
<br /><br />
But... what happened now is that these studios (Fox, Universal and Warner Bros.) told not just the distributors (Ingram and Video Product Distribution) but also retailers like Best Buy and Wal-Mart to not sell to Redbox.  That's restraint of trade.  The studios have every right not to sell videos to whomever they want -- but those distributors and retailers can then sell to whomever <i>they</i> want.  The studios should have no say in the downstream sales of the videos once they've been sold to the distributor, wholesaler or retailer.  That's where the antitrust issue is.  The studios are successfully controlling downstream sales.
<br /><br />
The studios are either being disingenuous or are just playing dumb when they claim that there's no antitrust violation because end users can still rent movies from Blockbuster or Netflix.  But, that's defining the wrong "user" for the market in question.  The market is in being able to buy from the distributor/wholesaler, and the "customer" is a retailer like Redbox.  And these studios have stopped that customer from being able to make a perfectly legitimate purchase.  That's the antitrust issue, and it's amazing that the studios think anyone will believe their false market definition or this bizarre claim that this about Redbox demanding some special price.  It's not.  Hopefully the judge recognizes that and doesn't fall for the studios simply making stuff up.<br /><br /><a href="http://www.techdirt.com/articles/20091019/0403026583.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091019/0403026583.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091019/0403026583.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>is-it-an-antitrust-issue-or-not?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091019/0403026583</wfw:commentRss>
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<pubDate>Fri, 21 Nov 2008 16:37:42 PST</pubDate>
<title>Zune Music Rental Service, Now With Stuff You Get To Keep, Too</title>
<dc:creator>Carlo Longino</dc:creator>
<link>http://www.techdirt.com/articles/20081120/1149262901.shtml</link>
<guid>http://www.techdirt.com/articles/20081120/1149262901.shtml</guid>
<description><![CDATA[ Online-music rental services -- where users get access to a library of songs for as long as they pay a monthly fee -- keep hanging around, despite little apparent interest in them. In an attempt to breathe some life into its subscription service, called Zune Pass, Microsoft is now <a href="http://online.wsj.com/wsjgate?subURI=%2Farticle%2FSB122715813445844027-email.html&#038;nonsubURI=%2Farticle_email%2FSB122715813445844027-lMyQjAxMDI4MjI3MDEyNTA4Wj.html">giving subscribers 10 songs they can permanently keep</a> per month. The company says its research shows that more consumers might consider subscription services at current pricing levels if they got "to take something with them." But isn't that just saying consumers prefer to buy music, rather than rent it? Rentals work for one-time-use items like movies and books, but for things like songs, which people tend to listen to multiple times, subscriptions aren't attractive. The argument that subscriptions are good for discovery doesn't really hold water, either, given the proliferation of online services that let users listen to huge libraries of music for free. One other angle to this news: why would anybody purchase digital content from Microsoft after the <a href="http://techdirt.com/articles/20080422/234401923.shtml">PlaysForSure fiasco</a>, in which it shut off its DRM servers, making it impossible to transfer PlaysForSure-"protected" content to any new devices, rendering it largely useless?<br /><br /><a href="http://www.techdirt.com/articles/20081120/1149262901.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20081120/1149262901.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20081120/1149262901.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>getting-desperate?</slash:department>
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