Last summer, Boston’s City Council and Mayor Marty Walsh passed Boston's first ordinance regulating short-term rentals in the city, aimed at allowing homeowners to make extra money while stopping investor owners from buying up real estate to establish de facto Airbnb hotels.
The ordinance allows homeowners to rent extra rooms, or one entire apartment, as long as they register with the city and pay a small fee; and it prohibits short-term rentals by absentee, or so-called “investor” owners.
Airbnb lobbied hard against the measure; when it passed, the company threw the book at the City of Boston: Airbnb sued the city in federal court, arguing the ordinance is illegal.
The lawsuit here could have national implications.
That's because central to the company’s case is a federal law called the Communications Decency Act – or CDA – specifically, one part of that act known as Section 230.
It says that internet companies can't be held responsible for what users post on it.
“So basically what that means is I cannot be held responsible as the publisher of information that a user puts up there,” says Mason Kortz. Kortz is a clinical instructional fellow at Harvard Law School Cyber Law Clinic.
“If I post something defamatory about you on Facebook – I can be held liable, Facebook cannot be held liable,” Kortz explains. “Because they didn’t post the defamatory material, they just provided a service.”
In this case, Airbnb is taking aim at parts of Boston’s ordinance that penalize any quote " booking agent" for listing rentals that violate the city's new rules.
Airbnb argues it’s just publishing those ads -- if people want to post illegal rentals -- according to the Communications Decency Act - hey, that's not Airbnb's problem.
Airbnb did not respond to a request for comment.
Of course, Airbnb doesn't just publish other people's ads - the platform helps users register and post listings, it connects hosts and prospective renters, it provides feedback and ratings – and of course, it takes a cut of the rental proceeds.
“The argument I think Boston is likely to bring here is that they’re not holding Airbnb liable for publishing the advertisements that are put up by third-party hosts,” says Kortz.
“They’re holding them liable for facilitating third-party booking.”
It’s not the first time that argument’s been raised. The City of San Francisco raised the same argument, after Airbnb sued over a similar ordinance there – and a federal district judge sided with San Francisco.
“The district court said publishing the listings was not a problem,” says Eric Goldman, a professor of law at the University of Santa Clara and a co-director of the school’s High Tech Law Institute.
“However the moment that Airbnb took money on behalf of the listing vendor, then the city could regulate its activity and impose basically unrestricted sanctions..”
Airbnb appealed that decision, but the lawsuit was settled before the higher courts could rule one way or another.
That’s why Airbnb’s lawsuit against the City of Boston could set the stage for how and whether local communities across the country can regulate Airbnb and other and other Internet giants.
Goldman, who helped write an amicus brief supporting Airbnb in its motion for an injunction, says he understands cities’ concerns with preserving rental housing. But he disagrees with the district court’s ruling.
“Imagine if we were talking about a business like Ebay … the logic seems to be saying anybody could impose restrictions on Ebay … now Ebay has to be in the business of policing millions of small vendors that it doesn’t have the ability of policing,” Goldman argues. .
“Now we start to say any online market place can be turned into a police state.”
But other legal scholars disagree.
Abbey Stemler is a professor of Business Law and Ethics at Indiana University; Stemler also wrote an amicus brief, in a similar lawsuit brought by Airbnb against the City of Santa Monica – but on behalf of the city, not Airbnb.
“Section 230 has been grossly misinterpreted,” argues Stemler. The act, she says, “has been invoked to say, ‘We cannot be regulated we cannot be deputized to regulate ourselves.”
Stemler agrees that the CDA’s protections in many ways helped foster a better, freer internet – but says that the Act was never meant to immunize deep-pocketed companies like Airbnb from cities’ and towns’ traditional right to govern and regulate their own communities.
“Local communities have to be able to have a say on how these two thing interact, the physical and the digital,” Stemler says.
“Section 230 was never meant to to prohibit all forms of regulation for technologies that use the internet – it simply wasn’t.”
But Stemler says there could be trouble ahead for Boston – especially because of another part of the city’s ordinance, that requires Airbnb to submit regular reports to the city detailing where, when and for how many days its users are engaging in short-term rentals.
Another federal law – also cited in Airbnb’s lawsuit – protects online platforms from sharing user information. And because Airbnb doesn’t make host addresses public, the city will have an uphill battle enforcing its own ordinance without that information.
Stemler says the city might have to settle for spot enforcement – or relying on complaints.
Meanwhile, Airbnb and the city have called a temporary cease-fire: the city agreed to hold off enforcing the parts of its ordinance that could punish Airbnb, while the federal judge overseeing the cases decides whether or not to grant Airbnb a temporary injunction.
The ordinance remains in full effect for prospective hosts.