by Mia Taylor
Last updated: 3:33 PM ET, Fri March 15, 2019
In a ruling that could have national ramifications, Airbnb and HomeAway have failed to convince a U.S. court of appeals to do away with a Santa Monica law holding the companies liable for illicit rentals in the city.
The ruling by a three-judge panel of the Ninth Circuit is a significant setback in efforts to avoid regulation in cities that are working to crack down on short term rentals, which are seen as causing a shortage of local affordable housing.
According to a Bloomberg report, the ordinance in Santa Monica makes the companies responsible for booking rentals at properties that are not licensed by the Southern California city.
The court's decision effectively sides with the city in finding that the ordinance does not violate the U.S. Communications Decency Act of 1996, which is designed to protect online companies such as Airbnb and HomeAway from liability for content on their sites.
Airbnb is engaged in battles in various cities across the country, where communities are trying to reign in the impact of the home-rental platform, according to Bloomberg.
Most recently, in January, Airbnb and other home-sharing sites scored a victory in New York City, where a temporary reprieve was granted in the face of a law that would compel them to turn over renter data. According to Bloomberg, such a requirement could cut Airbnb's bookings in the city by half.
Meanwhile, in Paris, Airbnb is facing a $14 million fine for allegedly posting illegal advertisements.
Back in the United States, the company recently sued Boston in response to a new ordinance that aims to limit short-term home rentals while also levying restrictions and financial penalties on the company.
As for the Santa Monica case, Airbnb and HomeAway had apparently argued that the ordinance makes it impossible for them to operate. The city's measure means the two sites will need to monitor and remove listings for unregistered rentals.
The judges disagreed with Airbnb and HomeAway's line of thinking and explained as much in their ruling.
"Even assuming that the ordinance would lead the platforms to voluntarily remove some advertisements for lawful rentals, there would not be a 'severe limitation on the public's access' to lawful advertisements, especially considering the existence of alternative channels like Craigslist," the judges said in the ruling.
Airbnb issued a statement in which the company pointed out that the Santa Monica case doesn't reflect the progress it has made with other local governments across the United States.
Expedia meanwhile described the ruling as being out of step with other court decisions, claiming it runs contrary to the Communications Decency Act's protections for innovation on the internet.
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