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Airbnb files federal lawsuit after passage of prohibitive New York bill

On the same day that New York Governor Andrew Cuomo signed a bill that would allow authorities to fine hosts up to $7,500 for listing a property on rental sites like Airbnb, the company struck back and filed a federal lawsuit. The home rental giant claimed the new regulations would cause the company “irreparable harm.”

More specifically, the new law, which the New York state legislature passed in June, will “strengthen New York’s existing laws on short-term property listings, which, as of 2010, prohibit apartments — defined as buildings with ‘three or more units’ — from being rented out for less than 30 days.” With the law’s official passage on Friday, owners can face fines of $1,000 for their first violation, $5,000 for their second, and $7,500 for the third and every violation thereafter.

Airbnb filed on Friday afternoon in Federal District Court in the Southern District of New York against state attorney general Eric T. Schneiderman and New York City Mayor Bill de Blasio, according to the New York Times. “The company contends that the law violates the company’s constitutional rights to free speech and due process, as well as the protection it is afforded under the Communications Decency Act, a federal law that says websites cannot be held accountable for content published by their users.”

Airbnb’s purpose is to enable this illegal “content published by their users,” so New York lawmakers have utilized this gray area to pass the bill.

Related: New York City just shot down short-term Airbnb rentals, but the fight isn’t over

Linda B. Rosenthal, a Manhattan Democrat who sponsored the bill, told the New York times that the state is “taking a bold step that will hopefully set a standard for the rest of the country and other countries in the world that are struggling with the impact of Airbnb on affordable housing.”

As part of its complaint, the company said the law would “impose significant and immediate burdens and irreparable harm on Airbnb. In order to be assured of avoiding liability, including potential criminal prosecution, Airbnb would be required to screen and review every listing a host seeks to publish.”

While Airbnb argues the law conflicts with the Communicatoins Decency Act, one of the lawmakers behind the bill, New York Sen. Liz Krueger said regulators had the law in mind when the bill was drafted, “which is why it holds the hosts responsible for advertising illegal listings and does not impose any fines on Airbnb.”