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Cyrus Farivar - Nov 9, 2016 7:12 pm UTC

If the ruling is upheld on the likely appeal, it may pave the way for similar regulations of the short-term housing market in other cities.

Last month, Airbnb and San Francisco lawyers appeared before US District Judge James Donato to argue Airbnb’s motion for a preliminary injunction, which he denied on Tuesday.

As Ars reported previously, the new 2016 San Francisco law expands upon a previous ordinance that Airbnb itself helped initially draft. That ordinance requires hosts to have registration numbers from the city and pay a $50 fee for the privilege.

The San Francisco law also requires that listings on sites like Airbnb clearly publish this new registration number, and the law holds both the host and the "platform" (Airbnb) potentially civilly and criminally liable for non-compliance. Among other potential penalties, Airbnb or other platforms could be forced to pay $1,000 each time such a site processes a booking from an unlicensed host.

During last month's hearing, Airbnb focused on its legal argument that it was protected primarily under Section 230 of the Communications Decency Act. This law protects "computer service" providers from being found liable for speech made by its users.

But Judge Donato didn’t agree. As he wrote:

But the Ordinance does not threaten the liability plaintiffs fear. As the text and plain meaning of the Ordinance demonstrate, it in no way treats plaintiffs as the publishers or speakers of the rental listings provided by hosts. It does not regulate what can or cannot be said or posted in the listings. It creates no obligation on plaintiffs’ part to monitor, edit, withdraw or block the content supplied by hosts. To the contrary, as San Francisco has emphasized in its briefs and at oral argument, plaintiffs are perfectly free to publish any listing they get from a host and to collect fees for doing so—whether the unit is lawfully registered or not—without threat of prosecution or penalty under the Ordinance. Dkt. No. 57 at 9; Dkt. No. 72 at 25:20-24. The Ordinance holds plaintiffs liable only for their own conduct, namely for providing, and collecting a fee for, Booking Services in connection with an unregistered unit.

The two sides will again appear before the judge on November 17 to discuss lingering issues with how, exactly, the new law will be enforced.

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