Airbnb enters legal trouble in New York

Airbnb Inc. and New York state are in discussions to settle a suit over a new legal ban on advertising of some short-term rentals, according to two people familiar with the matter. The law prohibits the advertising of accommodations that can’t be legally rented out for less than 30 days, with violators facing fines of as much as $7,500 (AED 27,547). Airbnb sued to block the law, claiming it faced the possibility of “staggering penalties” if it were enforced. Lawyers for Airbnb, the state and New York City were to appear in court Monday but asked that a hearing be postponed pending a possible resolution, said the people, who asked not to be named because the discussions aren’t public. The move comes a week after the state and city said they would hold off enforcing the law until the suit is resolved. Officials can still go after apartment dwellers who flout the restrictions by advertising prohibited units on the Internet, including the company’s website. The new law doesn’t affect people, who rent out rooms as long as they are also staying in their homes at the time. San Francisco-based Airbnb operates an online service that matches travellers with renters who offer short-term accommodations. The company has faced opposition by the hotel industry and by cities that stand to lose out on hotel occupancy taxes. A ban in New York, the biggest rental market in the US, would put a dent in Airbnb’s ability to do business. (Bob Van Voris/Bloomberg)