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Airbnb Strikes Back at New York Rental Law

MANHATTAN (CN) — On the heels of brand new regulations on the home-sharing economy, Airbnb filed a federal lawsuit against New York City's mayor and the state's attorney general challenging the law.

Signed by Gov. Andrew Cuomo on Friday, the new measure authorizes fines of up to $7,500 for many short-term rentals.

The passage of New York Multiple Dwelling Law Section 121 sparked praise from New York City lawmakers, and the immediate threat of a lawsuit by San Francisco-based Airbnb.

Following through on that threat Friday afternoon, the Silicon Valley giant wants a federal judge to declare that the new law is an unjustifiable content-based restriction of the speech in violation of the First Amendment.

The new legislation makes it "unlawful to advertise occupancy or use" of accommodations that cannot lawfully be rented out for less than 30-day periods.

On top of fines, violators face civil and possible criminal penalties.

After its signing, Airbnb's head of New York public policy Josh Meltzer lambasted the legislation as "Albany back-room dealing" that served "a special interest - the price-gouging hotel industry - and ignored the voices of tens of thousands of New Yorkers."

He added: "A majority of New Yorkers have embraced home sharing, and we will continue to fight for a smart policy solution that works for the people, not the powerful."

In its 19-page lawsuit, Airbnb claims that the statute conflicts with, and is preempted by, section 230 of the Communications Decency Act of 1996, widely considered landmark legislation for free speech on the internet.

New York Attorney General Eric Schneiderman, one of the defendants in the lawsuit, vowed to fight Airbnb's litigation.

"The law signed today will provide vital protections for New York tenants and help prevent the continued proliferation of illegal, unregulated hotels, and we will defend it," he said in a statement. "Airbnb can't have it both ways: it must either police illegal activity on its own site — or government will act to protect New Yorkers, as the state just did."

New York City spokesmen joined the state in their vociferous defense of the new law.

"We take on operators of illegal hotels who put people in unsafe conditions and displace affordable homes," City Hall spokesman Austin Finan said. "We would apply this tool, just as we do our current ones, to hold bad actors accountable."

New York City Mayor Bill de Blasio is a co-defendant to the suit.

"We oppose their efforts to stop this law from taking effect," New York City Law Department spokesman Nick Paolucci added.

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