On June 7, 2016, which also happens to be primary day in California, the San Francisco Board of Supervisors voted unanimously to amend the City’s Residential Unit Conversion Ordinance (the so-called Airbnb Law) to require Hosting Platforms such as Airbnb, Homeaway, etc., to assume responsibility for ensuring that individuals listing their properties on the platform have a current registration with the City, despite the fact that the amendment almost certainly runs afoul of federal law, which expressly exempts websites and other “interactive computer services” from having to police postings made by third parties. The amendment would effect a form of prior restraint, prohibiting Airbnb, Homeaway and others from allowing an individual to list their unit for rent without the Hosting Platform first contacting the City’s Office of Short-Term Residential Rental Administration and Enforcement to verify that the unit is properly registered with the City. The amendment would also compel the Hosting Platform to list the City-assigned registration number along with the listing. Finally, the amendment directs the City’s enforcement office to notify hosting platforms of any unregistered listings on their platforms and requires the platform to provide evidence of registration within one business day or face substantial fines or criminal penalties. The practical effect of this latter provision would seem to be to compel the Hosting Platforms to actively police listings for compliance and to remove non-compliant listings prior to notification.
Section 230 of the Communications Decency Act was enacted by Congress in response to a court decision holding a website liable for content posted by users of the site, where the website had undertaken to remove certain content but had failed to remove the content at issue in that case. Congress thought it a very bad idea to punish websites for taking action to try to eliminate harmful content, recognizing the tremendous burden imposed on sites to actively police thousands of listings under threat of legal liability, and rightly believed that such a burden would inhibit innovation and impinge on free speech. To remedy the situation, Congress enacted Section 230, which the courts have made clear immunizes websites from legal action attempting to hold them liable for content posted by users of the site. The June 7 amendment would run directly afoul of Section 230, by subjecting a hosting platform to substantial civil and criminal penalties for not policing third party content posted to its platform. The amendment might also be subject to challenge on First Amendment grounds as a prior restraint on free speech.
Press reports regarding the Ordinance indicate that at least some members of Board recognize that the Ordinance is likely unlawful, and the Board has plainly attempted to legislate around Section 230 by avoiding directly requiring the Hosting Platforms to remove suspect listings — instead, directing it to verify registration with the City or provide verification in response to notifications from the City. However, the effect of the Ordinance is the same – to compel Hosting Platforms under threat of legal sanction to assume a policing function with respect to third party rental listings. I would expect that if challenged, a court would agree that the amendment is unlawful. It will be interesting to see whether Airbnb will seek to challenge the amendment, as it has been the subject of withering criticism in some circles for opposing enforcement measures that it views as going too far.
The full text of the amendment can be found here.
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