Last updated: 02:30 PM ET, Fri June 24 2016

French Hotels Hit Airbnb with Unfair Competition Complaint

Hotel & Resort | Patrick Clarke | June 24, 2016

French Hotels Hit Airbnb with Unfair Competition Complaint

Photo courtesy of Thinkstock 

A French association of hoteliers has submitted a formal complaint against home-sharing platform Airbnb and other online short-term rental services alleging that they compete unfairly, the Financial Times reported.

AhTop, which represents more than 30,000 hotel companies including Best Western and others, lodged the complaint with the Paris prosecutor's office back in November 2015, but announced the move publicly this week.

The complaint requested authorities to look into and determine whether online accommodation rental services like Airbnb and others were paying the appropriate taxes. AhTop said it expects a decision from the office on whether to move forward with a case within the next few weeks.

"We are not against these platforms at all," AhTop president Jean-Bernard Falco said in a recent press conference. "But we want them to play by the same rules of the game."

However Silicon Valley doesn't see it the same way.

"It is disappointing — but not surprising — to see hotels attack new forms of travel that put euros in the pockets of local residents and support small businesses outside hotel districts," San Francisco-based Airbnb said in a statement to the Times.

READ MORE: Airbnb to Begin Collecting Hotel Occupancy Tax for Pennsylvania Hosts 

According to estimates from French law firm Gide Loyrette Nouel, Airbnb generates more than $66 million in revenue in France but pays less than $100,000 in taxes because of under-reporting.

In addition to the tax issue, AhTop alleges that Airbnb and others are in violation of French law because many of the spaces are rented out for more than the maximum of 120 days a year.

Nonetheless Airbnb contends that its typical French host in France earns a little less than $2,200 per year and more than 40 percent of those hosts rely on the income to stay in their home.

READ MORE: Airbnb Secures $1 Billion Debt Facility from US Banks

While it remains to be seen whether a formal case will be opened, the office's decision will be worth watching closely as France is Airbnb's second-largest market behind only the U.S.

Airbnb's uncertain situation in France comes as the platform struggles to combat issues of racial discrimination in the U.S., where recent incidents have fueled a wave of inclusive home-sharing startups.

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