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Thursday, December 15, 2016

AirBnB as Online Intermediary?

Tuesday I posted about tort law and the sharing economy, and today I want to continue with the sharing economy theme by discussing an AirBnB lawsuit against San Francisco. 

A city ordinance was passed requiring short-term rental hosts to register with the city. One of the provisions allows the city to fine AirBnB and similar platforms if unregistered hosts rent places through the site. AirBnB is challenging the law on numerous grounds, including under the First Amendment, Stored Communication Act, and the Communication Decency Act (CDA). It's the CDA issue that some cyberlaw scholars are watching closely. 

Section 230 of the CDA creates immunity for online intermediaries against liability for the content others post. This immunity has allowed the internet as we know it to flourish as a marketplace of ideas and haven for free speech. Without it, websites would police content and censor heavily to mitigate their liability risk. But the CDA is over 20 years old and its use has clearly expanded beyond its original purpose, which really contemplated defamatory comments on news sites or similar circumstances. 

Now, AirBnB is using CDA immunity to argue that the San Francisco ordinance violates federal law by holding AirBnB accountable for the actions of hosts. Essentially, AirBnB says it's just an online intermediary and it can't be on the hook for its users' illegal activity. While the CDA is meant to immunize online intermediaries for liability for the actions of its users, its provisions are not absolute. Some websites have lost arguments about CDA immunity because they helped create or develop content, rather than merely serve as a passive platform for it. 

Last month a federal court in San Francisco did not agree with AirBnB and denied its motion for a preliminary injunction, noting that the ordinance is not limiting AirBnB's ability to publish user content. Instead, the ordinance's penalties kick in when AirBnB collects fees for an illegal rental. For AirBnB, losing its preliminary injunction motion is probably quite concerning. CDA immunity is not clear cut because AirBnB imposes requirements on hosts, profits from each individual transaction, and processes the payments. Like other sharing economy companies, its role expands beyond that of a neutral listing platform, perhaps even into the realm of booking agent or joint venture. 

It's important to note that CDA immunity is crucial for protecting our freedom online, and attempts to chisel away at it should be approached with great skepticism. But as we continue to blur the lines between real-world transactions and online activity, perhaps a more nuanced definition for "online intermediary" is needed in order to save Section 230 from dilution. In the meantime, a lot is at stake for AirBnB, as other cities contemplate similar ways to deal with a loosely regulated ad-hoc rental market. 

Posted by Agnieszka McPeak on December 15, 2016 at 09:04 AM in Information and Technology, Property, Web/Tech | Permalink


@Orly Lobel

Not a very balanced article. The section "Market Challenging or Market Creating?" cites personalizes the benefits of AirBnB, but when it comes to "The Experience Economy: Does Airbnb Violate Zoning Laws?" the negatives of AirBnB to neighbors is hidden behind "City officials fear ". Not one citation at all to the many articles that discuss the hell of living next to an AirBnB unit in what is supposed to be an apartment building and not a hotel. Half the NYC paragraph is taken up by puffing up AirBnB's proposal to gut NY's laws protecting its residents. How is insurance supposed to help people repeatedly woken up at 3AM on by an ever changing cast of European vacationers?

Posted by: brad | Dec 16, 2016 12:12:10 PM

Jamila and Orly - Thank you for the article links!

Brad - Oddly enough, AirBnB does offer free professional photography of units in some markets (https://www.airbnb.com/info/photography). Not sure if that'll affect the analysis in this case but it certainly shows yet another level of involvement in the underlying transactions.

Posted by: Agnieszka McPeak | Dec 16, 2016 11:19:19 AM

I have written about the topic including a short section about the CDA in my new article, the Law of the Platform, Minn Law Review -

Posted by: Orly Lobel | Dec 16, 2016 12:42:05 AM

I fail to see any plausible argument that AirBnB is being penalized for the content of its users posts. They are being penalized for conspiring with hosts to violate the law and profit from those violations. The user generated content is a red herring. If AirBnB sent employees to take photographs and write up descriptions nothing material would change.

Finally, "sharing economy" is a cynical propaganda term from a company in the business of violating laws designed to prevent companies from doing exactly what AirBnB is doing -- benefiting from the sociopathic generation of uncompensated negative externalities.

Some state attorney general should look into filing a criminal RICO case.

Posted by: brad | Dec 15, 2016 5:13:28 PM

It is certainly time for a more nuanced approach to defining "online intermediary" under Section 230 of the CDA. Innovation in the sharing economy is moving much more quickly than those charged with regulating it. The challenge with fashioning any amendment to the CDA will be in building in sufficient flexibility to allow the law to keep pace with the real world. I, for one, have advocated for amending the CDA to allow platform owners like Airbnb to face liability for the unlawful discriminatory acts of its users (in this case, hosts) (http://urbanlawjournal.com/shut-out-of-airbnb-a-proposal-for-remedying-housing-discrimination-in-the-modern-sharing-economy/). My proposal does, however, leave us with the question of whether such an amendment would open the floodgates to further weakening of the CDA and whether that would or could be a positive development

Posted by: Jamila Jefferson-Jones | Dec 15, 2016 2:55:14 PM

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