The French court’s latest ruling has determined that Airbnb is culpable for the actions of its hosts.
A Paris apartment owner sued both Airbnb and the tenant who rented out her apartment on Airbnb without permission. The Paris court found for the apartment owner and ordered both Airbnb and the tenant to pay nearly 52,000 euros (US$59,000) plus 5,000 euros in legal fees, Bloomberg reports. The fine was “to make up for the rent received for the subletting.” Airbnb was also ordered to return 1,558 euros in commissions.
The Paris judge declared that Airbnb is a publisher and therefore, responsible to review ‘advertisement’ on its platform, which connect hosts and travelers. As a result, the company shared responsibility if a host uses Airbnb to act illegally.
Airbnb is appealing the decision citing that the case is a private landlord and tenant dispute and goes against French and EU rules. If the ruling is upheld, the implication is significant regarding Airbnb’s financial risk exposure.
“This decision brings financial responsibilities to bear on Airbnb, which will be answerable for abuses committed on its platform,” said Jonathan Bellaiche, the lawyer for the apartment owner. “Legal risk has become an economic risk.”
France with its strict housing laws has had a particularly contentious relationship with Airbnb. The French want Airbnb to be more accountable, similar to hotels.
Last December, Forbes reported that Airbnb scored a major win against several French cities. These cities are appealing the decision.
Airbnb won a major victory in France when the European Court of Justice ruled that the sharing platform was an “information society service” and not a real estate agent. The French tourist association, AhTop, had filed a complaint with the EU courts protesting that it was unfair that Airbnb be exempt from France’s very strict housing laws.
Business Insider reported that AhTop believes Airbnb should be as responsible for making sure its users comply with building regulations and taxes as any other hotel. Airbnb argued that it shouldn’t have to operate under these rules because it is simply an internet service linking the host and the guest and doesn’t actually provide hotel rooms itself.
Reuters reported that AhTop had urged the French government to take action against the ruling. On Friday, eight European cities–Paris, Bordeaux, Amsterdam, Vienna, Brussels, Berlin, Munich and Barcelona–have launched an appeal. They have asked for a new directive with a more equal footing for accommodation providers.
The cities also want platforms like Airbnb to provide information to help them crackdown on short term rentals.
France has required Airbnb to supply local governments with rental data on the type of housing being offered, the number of guests and hosts’ names and addresses. According to Forbes, the cities are making Airbnb share their data “so that cities can hunt down taxes, enforce safety standards and ensure that property is not rented out for more than the current maximum of 120 nights per year.”
Tensions between Airbnb and Paris, in particular, has been escalating. In November 2019, the Mayor of Paris threatened to outlaw Airbnb in some parts of the city after Airbnb won the Olympic sponsorship deal.