Cities Rushing To Restrict Airbnb Are About To Discover That They're Violating Key Internet Law

from the bad-ideas dept

Fights over tech policy are going increasingly local. Most technology regulations have been federal issues. There have been a few attempts to regulate on the state level -- including Pennsylvania's ridiculous attempt to demand ISPs filter out porn in the early 2000s. But state legislators and Attorneys General eventually learned (the hard way) that federal law -- specifically CDA 230 -- prevents any laws that look to hold internet platforms liable for the actions of their users. This is why state Attorneys General hate Section 230, but they need to deal with it, because it's the law.

It's looking like various cities are now about to go through the same "education" process that the states went through in the last decade. With the rise of "local" services like Uber and Airbnb, city by city regulation is becoming a very, very big deal. And it seems that a bunch of big cities are rapidly pushing anti-Airbnb bills that almost certainly violate Section 230 and possibly other federal laws as well. In particular, San Francisco, Los Angeles and Chicago are all pushing laws to further regulate platforms for short term housing rentals (and yes, the SF effort comes just months after another shortsighted attempt to limit Airbnb failed).

The bills basically look to force people who want to use platforms like Airbnb to register, but then look to hold the platforms liable if a renter does not include the registration info in their profile. Gautam Hans does a nice job in the link above outlining why San Francisco's proposed bill -- which will be voted on shortly -- clearly would fail to survive a Section 230 challenge:
This imposition of liability clearly goes against Section 230, which states in (c)(1) that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” — meaning that, if an information content provider, typically an individual user, posts something illegal, the interactive computer service, typically a website, can’t be held liable for it. Moreover, under (e)(3), “no liability may be imposed under any State or local law that is inconsistent with this section.” States and localities can pass laws that are consistent with Section 230, but anything inconsistent with Section 230 — like the imposition of liability on a website operator for user-generated content — is unlawful. From a logistical perspective, this makes a great deal of sense. If states and cities could enact a variety of conflicting laws, the whole point of Section 230 would be undermined. As a global medium, the internet wouldn’t work if it were subject to piecemeal regulations by every state and city within the US.
Hans also points out that the Chicago proposal (which is ~50 pages!) is equally bad:
The other recent proposal, from Chicago, creates similar issues by holding platforms liable for user content. Like the San Francisco proposal, it uses fines as the leverage to require platforms to ensure that listings on a platform have been approved by the city. And, as with the San Francisco proposal, the architecture of the liability structure runs afoul of Section 230’s preemption clause. The problematic language in this legislation, Section 4-13-250, states “It shall be unlawful for any licensee … to list, or permit to be listed, on its platform any short term residential rental that the commissioner has determined is ineligible for listing”; the penalty for violations, in Section 4-13-410, is “a fine of not less than $1,500.00 nor more than $3,000.00 for each offense. Each day that a violation continues shall constitute a separate and distinct offense.” This essentially creates a strict liability regime for website operators based on third-party content: if a user uploads a non-compliant rental listing, the site operator would immediately be in violation of this provision, regardless of whether they were aware of the posting or its ineligible status. No matter what the amount the potential fine is, this imposition of liability clearly contravenes Section 230.
Hans doesn't cover the LA law, but it's just as problematic (potentially more problematic!). Like the SF and Chicago bills, the focus is on requiring registration, and then puts liability on the platforms:
Hosting Platform Requirements.

(1) Actively prevent, remove and cancel any illegal listings and bookings of short term rentals including where a listing has been offered: without a Home-Sharing registration number; by a Host who has more than one listing in the City of Los Angeles; or, for a rental unit that exceeds 90 days in a calendar year.
Yes, sure, cities are concerned about how Airbnb can impact the way cities are run -- though over and over again we've seen evidence that Airbnb can be super helpful to cities in terms of increasing tourism and opening up new ways for people to earn money. But, if cities want to target questionable practices, they should do so by targeting the actual questionable practices, not by trying to skip around Section 230 and pretending it doesn't exist. I'm sure, as with the state AGs, we may hear city officials whine about how terrible Section 230 is and how it gets in the way of them "protecting citizens" or whatever they're going to claim, but those claims are silly. Section 230 is about properly targeting liability. When you point the liability in the wrong direction -- at platforms -- you reduce innovation and chill useful services. As Hans notes:
Enforcing the laws of a city or state is an important goal, especially when those laws are designed for compliance, safety, and non-discrimination. Yet it is equally important to ensure that the internet remains an open platform for innovation and exchange, which requires ensuring that intermediaries are not held legally responsible for content they did not author. In enacting Section 230, Congress ensured that this value would be the law of the land, and it is important that cities and states abide by superseding federal law.
One would hope that the cities in question would recognize the legal problems with their own bills before they decide to move forward on any of them. Otherwise, they're just going to end up wasting a ton of taxpayer money when someone takes these to court, and the cities inevitably lose, just as the states did a few years ago.





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  • icon
    freedomfan (profile), 26 May 2016 @ 6:03pm

    Much like a three-year old denied his favorite candy, these legislators are mentally and emotionally unequipped to deal with a world in which they cannot do whatever they want by passing a law.

    They are saying, essentially, that if someone takes out a classified ad to provide/sell/buy something in a way the legislators do not like, they ought to be able to hold the newspaper accountable. The real goal the legislators have is to prevent an activity they don't like without obligating the city to do the work. And, of course, the legislators don't want to incur either the expense of dealing with the rental providers individually or the public scrutiny that will result when people start taking their offerings off the market because the city wants individual renters to comply with the mountain of regulations and taxes that they foist on hotels, which most large cities think of as cash cows. They probably also don't want people figuring out that they are carrying water for the hotel industry.

    (BTW, I feel bad that the hotel operators have to deal with such nonsense as well. But, the fix for one person's misery is not to make everyone else equally miserable.)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 26 May 2016 @ 6:14pm

    Say state law requires alcohol sellers to verify that buyers are at least 21 years old by checking photo ID against a database of issued IDs. This law applies to brick and mortar sellers as well as online sellers. Are you seriously arguing that 230 would invalidate the law as applied to online sellers since the ID info is supplied by users? That makes no sense. I know you love 230, but it doesn't apply to every situation of users inputting info online. Just because you copied and pasted this doesn't make it true.

    reply to this | link to this | view in chronology ]

    • icon
      freedomfan (profile), 26 May 2016 @ 6:27pm

      Re:

      What are you talking about? Compliance with alcohol sales laws should fall on the seller and the buyer, not the owner of the venue where the booze is advertised.

      (BTW, copied and pasted what?)

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 26 May 2016 @ 7:20pm

      Re:

      No, because your example eliminates the intermediary. The equivalent situation would be a local flyer that allowed people to post ads saying what they were selling, and someone who didn't do the required check posting an ad saying they were selling alcoholic beverages. The person doing the selling is liable for failing to comply with the regulations, but the publisher of the flyer is not liable for the seller's failing.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 26 May 2016 @ 8:39pm

      Re:

      That's not how any of that works, but thanks for playing.

      reply to this | link to this | view in chronology ]

    • icon
      Wyrm (profile), 27 May 2016 @ 9:25am

      Re:

      Your analogy is way off.
      The closest thing to your example here would be to hold the landlord of the liquor store accountable rather than the owner of the store.
      Nobody here is saying that renting regulations shouldn't apply. It's about who you're holding responsible for violations. It's obviously not difficult to go after each individual poster when you could just target the platform they're posting their ads on. That doesn't make suing and dining the platform more legal... or even "right" in any way.
      So, enforcing regulations means you go after the ones who post the illegal content, not the owner of the place they choose to do so.

      reply to this | link to this | view in chronology ]

    • icon
      sdenbeste (profile), 27 May 2016 @ 1:16pm

      This is a bad analogy because the 21st Amendment gives states unlimited right to control alcohol sales within their borders. An act of Congress cannot override that.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 26 May 2016 @ 6:20pm

    Uh, no. There's really nothing to be gained by being ignorant about CDA 230.

    Try this, it's easy to understand:

    http://www.huffingtonpost.com/mary-anne-franks/section-230-the-lawless-internet_b_4455090 .html

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 26 May 2016 @ 8:29pm

    Every government official ever: fuck airbnb for increasing temporary housing flexibility and making people wealthier!!! How dare they!!!

    reply to this | link to this | view in chronology ]

    • identicon
      Rebecca Lucas, 14 Nov 2017 @ 12:15am

      Re: Airbnb

      Apparently posters here have never experienced the down side of Airbnb, et. al with their promotion of STVR for under 30 days in tourist/resort cities where the rental stays are mostly weekends. The government officials are responding to the complaints by residential mostly R-1 R-2 zoned neighborhoods that have been adversely affected by STVRs. Homes have been purchased by investors for the sole purpose of the renting for short terms because of the large profits. These profits are made at the expense of the real neighbors who are sick and tired of the many party houses that enforcement cannot control. These de-facto hotel/motels are operating as commercial businesses in residential zones. Data shows that for Airbnb the whole house rental is their big business NOT what they claim in their PR media which is true home sharing( renting a room in an owner occupied home).

      reply to this | link to this | view in chronology ]

  • icon
    Hephaestus (profile), 26 May 2016 @ 9:00pm

    The thing I am waiting for is the first time a city decides to take on a DAO (Decentralized Antonymous Organization) doing business in their city.

    city council member : WTF do you mean the company has no board members, no one to fine, no one to hold accountable, just rules that can not be altered ...

    https://en.wikipedia.org/wiki/Decentralized_autonomous_organization

    reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 26 May 2016 @ 9:41pm

    The perfect case

    I think this is a great example of trying to stretch section 230 to cover what it really should not cover: Commercial announcements and postings.

    (you can insert comment here that in Techdirt world, section 230 is a one way ratchet of more and more things "protected" along the way).

    Discussions on a public chat board would be one thing. Having a chat here about your latest Airbnb rental in Chicago wouldn't be an issue. But Airbnb listing a property that is not permitted as a short term rental should not fall into the same area at all. Airbnb can, should, and must verify that properties are valid and being rented by the owner in compliance with the law. Anything less is a shameful negligence of their basic duties to consumers - and could constitute a form of fraud on the public.

    It's not useful to try to compare airbnb to a classified ad service, as they are not only a listing site, but also collect the money and charge a fee for doing so (and you apparently must use their payment system in order to participate. They are defacto partners in the rental process, and thus section 230 should not trump standard business laws. Airbnb may not like it, but they are in many ways a reseller / agent / brand for your individual properties.

    For what it's worth, if I book a hotel room through Hotwire and pay them directly, they do in many ways become legally part of the process. If I had a customer service issue, I would take it up with them. They are not just a commissioned agent (like a travel agent in the past) but rather a reseller and wholesale agent.

    Section 230 only applies if you buy into Airbnb being an "innocent host" with no financial interest in the rental process and no liability. It's just not legally proven to be that way.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 May 2016 @ 10:09am

      Re: The perfect case

      Umm, Section 230 explicitly covers what you claim it does not.

      But oh well.

      reply to this | link to this | view in chronology ]

      • icon
        Whatever (profile), 28 May 2016 @ 7:55am

        Re: Re: The perfect case

        Section 230 would cover if AirBnB was running a discussion site about rentals - not a rental site. It would protect the individual comments added by end users (consumers), but it would not appear to protect them from items listed by their business partners.

        An AirBnB "listing" is the creation of a partnership between the company and an individual owner, no different in many ways from say a hotel franchise (say Choice Hotels). While section 230 might protect user comments, it would not appear to protect information related to part of the chain. AirBnB has control over the content (they have to approve a listing) and must enter into a business agreement to list a property. That would normally suggest that they have taken the normal steps to assume that they could enter into a contract to start with.

        Section 230 doesn't usurp contract law, does it?

        reply to this | link to this | view in chronology ]

    • icon
      Mike Masnick (profile), 27 May 2016 @ 1:12pm

      Re: The perfect case

      Section 230 only applies if you buy into Airbnb being an "innocent host" with no financial interest in the rental process and no liability.

      This is 100% false. You look foolish stating false things, but you've done it for so long perhaps you don't care?

      reply to this | link to this | view in chronology ]

      • icon
        Whatever (profile), 29 May 2016 @ 7:33pm

        Re: Re: The perfect case

        Mike, think about it for a second. AirBnB isn't just a posting board, it isn't just a comment or review site - it's listings for AirBnB properties, ones that you pay AirBnB to use. Information related to those properties isn't random posting or some anonymous comments, it's what they are offering.

        The company can and does decide what properties are listed, profits from them, and should have completed a background check to assure that the property is legal and can be rented. It's perfectly normal for a city, state, or even a country to have regulations related to this type of rental. It's not a section 230 issue, unless you want to try to claim AirBnB as some sort of chat board.

        AirBnB should not be listed anonymously submitted properties. It should not be listing properties it knows are not legal. It should be checking to make sure these properties meet local laws. Failure to do so has nothing to do with free speech or protecting a hosting company.

        Sorry, but your short answer is, well, foolish.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 28 May 2016 @ 8:13am

      Re: The perfect case

      How's your John Steele fund going, bro?

      reply to this | link to this | view in chronology ]

  • icon
    SirWired (profile), 27 May 2016 @ 3:37am

    There are some differences

    AirBnB does a lot more than, say, Craigslist. AirBnB has an entire booking engine vs. just a listing platform. I'd say that that you could make an argument that that (especially the part where they process the money) puts them past the category of a "publisher or speaker", since they are actively involved in operation of the business.

    reply to this | link to this | view in chronology ]

    • icon
      BJC (profile), 27 May 2016 @ 5:16am

      Re: There are some differences

      I agree. I think that there's an argument that AirBnB is a "market maker" rather than a passive advertiser; that, without AirBnB, there is no business. As such, it's not the message board "provider of information services" covered by Section 230.

      However, a number of courts have disagreed when it comes to Ebay, which is a not too-dissimilar service.

      reply to this | link to this | view in chronology ]

      • icon
        GrooveNeedle (profile), 27 May 2016 @ 7:05am

        Re: Re: There are some differences

        I disagree. I could potentially rent out my property without using AirBnB, and would still fall into the crosshairs of what these cities are complaining about.

        Really, the property owner is the company, and AirBnB is a vendor they've contracted (in some fashion) to facilitate transactions and bookings with their clients/customers. AirBnB isn't responsible for the property owner following applicable laws.

        Several hotels I've used, and LOTS of local restaurants, don't manage their bookings themselves, but redirect you to a 3rd party site (e.g. OpenTable.com). AirBnB is not much different, except you start at the AirBnB site instead of the property's site.

        reply to this | link to this | view in chronology ]

        • icon
          SirWired (profile), 27 May 2016 @ 7:41am

          Re: Re: Re: There are some differences

          AirBnB does a lot more than "facilitate transactions" like OpenTable. For starters, AirBnB acts as an escrow agent. They also provide insurance, performance guarantees, etc. None of which you get through Random Hotel Booking Service or OpenTable.

          It is not controversial to hold Real Estate agents responsible at least somewhat for their listings, and that obligation would not magically disappear if a Real Estate broker decided to operate solely online.

          CDA 230 was not written as a Get out of Jail Free card. If it's illegal to do something on the phone (like set up rentals for unlicensed properties), it's still illegal to do it on the Internet.

          reply to this | link to this | view in chronology ]

          • icon
            GrooveNeedle (profile), 27 May 2016 @ 8:46am

            Re: Re: Re: Re: There are some differences

            I admit to never having used AirBnB, so I'm not clear on all that they offer.

            CDA 230 was not written as a Get out of Jail Free card. If it's illegal to do something on the phone (like set up rentals for unlicensed properties), it's still illegal to do it on the Internet.

            I would agree, illegal offline is still illegal online, the addition of "on a computer" doesn't change the action, the technology is merely a tool. I just want to make sure the correct parties are blamed for their respective actions (illegal or otherwise).

            reply to this | link to this | view in chronology ]

  • icon
    rob (profile), 27 May 2016 @ 5:52am

    The real argument

    I suspect that opinions about 230's relevance to AirBnB fall along the same line that separates people who believe that AirBnB simply applies liquidity to a creaky housing market and those people who believe that cities have a role in regulating housing that's worth protecting.

    Liberalism vs. Libertarianism.

    AirBnB has saved some travelers some money, and it's made some other people some extra money. AirBnB has also driven up the cost of housing by reducing inventory. And AirBnB is clearly not just a listing or hosting service: they conduct the transaction, provide insurance, and run ad campaigns. Craigslist they are not.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 May 2016 @ 9:53am

    Even if you do take the legislators at their word that this is to protect people from scams and har, when did the government consider people so immature that the people can't handle the problems themselves.

    When an actual crime is committed deal with it otherwise, let the buyer/seller beware.

    reply to this | link to this | view in chronology ]

  • identicon
    arnienyc, 27 May 2016 @ 12:38pm

    Airbnb is acting as an intermediary to each transaction--every time a renter and a homeowner get together, Airbnb takes a healthy cut of the transaction and they also facilitate the payment. This goes far beyond merely providing a platform for the 2 parties to get together (like Craigslist).

    In Manhattan, the vast majority of Airbnb rentals are illegal and Airbnb knows full well that they are. The analogy I would draw is an online broker like Fidelity KNOWINGLY providing incorrect stock price information when facilitating a trade. That type of offense would be prosecuted vigorously and so too should Airbnb's profiting from illegal rentals.

    reply to this | link to this | view in chronology ]

  • icon
    John Pettitt (profile), 27 May 2016 @ 1:01pm

    This law could be written without mentioning the internet or content

    "No company shall remit funds to or accept commissions from an individual or business providing short term rental accommodation unless the recipient has previously provided evidence to the company that they posses the requisite zoning and licensing approvals to rent the property" (or something like that)

    No speech issue, no CDN issue. It would still allow flat rate ads (no commission or collecting funds) but it would shut the door on airbnb and vrbo. Or did I miss something.

    reply to this | link to this | view in chronology ]

    • identicon
      arnienyc, 27 May 2016 @ 2:13pm

      Re: This law could be written without mentioning the internet or content

      Great idea. It wouldn't shut the door on them, but it would drastically alter their business model--bye, bye $25 billion valuation.

      reply to this | link to this | view in chronology ]

  • icon
    Dyspeptic Curmudgeon (profile), 28 May 2016 @ 1:57pm

    The Real Answer

    The real answer to this sort of stupid, is for the AirBnb's of the world to host in a different country. The US has become so reactionary and grasping that the safest business model is to have the active portions hosted somewhere safe, such as in Brazil.. where there is no extradition or mutual assistance treaty.
    Here a few weeks ago it was noted that a LEO had subpoened information from 23andMe. The intention being, one assumes to track a DNA match to or from a suspect. And there is no effective way for 23andMe to fight back, except, to have all of the DNA profiles stored somewhere in the world where there are strict data privacy laws. The DNA testing could still be done in the US (or better, Canada) but the data would never be retained.
    Same with AirBnB. And there would be very little exposure for airbnb.ca to any US municipality's whinging.

    And of course, the lesson never sinks in. This is a parallel to situation to the utility of anonymous Panana corporations.

    reply to this | link to this | view in chronology ]

  • identicon
    Wesley Quirkson, 30 May 2016 @ 5:55am

    Democrats Run All the Cities that Want this regulation

    Have you not notices that Democrats run all the cities in question. and Boulder and Denver and all the other places they want it. Colorado Springs STRs are legal, run by Republicans. And, most of this isn't about the money. Most rentals would gladly pay a STR fee below that of hotels. It is about power and control. Most onerous regulations include clauses that you have to live in the house (so the VRBO you rent is full of the owners clutter and other hoops one has to jump through... putting power in the hand of STAFF.

    reply to this | link to this | view in chronology ]


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