Airbnb, like pornography, is a business based on selling a fantasy. Porn offers the simulacrum of a sexual encounter; Airbnb, that of being “a local” in a city not one’s own. There’s less fuss, less muss, and a much reduced chance of STDs and irritated neighbors.



At least, there’s less fuss for the visitors. Cities around the world, however, are waking up to the headache of hosting transient populations in previously residential neighborhoods, and attempting to crack down.

But while local politicians in Reykjavík, Berlin and Barcelona are taking a stand against Airbnb, their counterparts in the United States have struggled to come up with regulations that have teeth.

On Monday, Airbnb sued San Francisco in federal court, seeking to prevent the city from enacting a strict new law that would put the $26.5bn company on the hook for ensuring that its listings comply with local regulations.

Suing its hometown is a tricky move for a company that has attempted to brand itself with the sense of belonging, but legal experts tend to agree that Airbnb is in the right: Airbnb is protected from much local regulation by a twenty-year-old federal law that was originally intended to purge the internet of porn.

How Section 230 changed the internet

In the summer of 1995 – back when it took at least an hour to download a decent nude photo from the internet, let alone a video – senator James Exon of Nebraska took to the floor of the US Senate to deliver a prayer over the “virtual but virtueless reality” of internet pornography.

“Almighty God, Lord of all life, we praise You for the advancements in computerized communications that we enjoy in our time,” he intoned, before beseeching God to guide the Senate in regulating indecency out of the internet, or as he put it, “consider ways of controlling the pollution of computer communications”.

Exon’s prayer was answered with the passage of the Communications Decency Act of 1996, a much-maligned law that was decried by free speech advocates, dismissed as a “departing Senator’s half-baked notions” by the New York Times editorial board, and swiftly struck down by the supreme court.

Twenty years later, what remains of Exon’s quixotic quest for a godly cyberspace is Section 230 of the Communications Decency Act, a last minute addition to the legislation that nevertheless has become the linchpin of the modern, open internet.

Section 230 holds that providers of “interactive computer services” cannot be held liable for the content that users post on their sites. That means that Yelp cannot be held liable for users leaving negative reviews of your business and eBay cannot be held liable if you bid on an autographed baseball that ends up being counterfeit: the platforms are held to be neutral intermediaries and their tantalizingly deep pockets are out of reach.

Senator Ron Wyden told the Guardian that he and Chris Cox, then a Republican congressman from Orange County, California, wrote Section 230 “to allow the internet to grow and flourish, and prevent lawsuits from crushing new platforms for commerce, education and speech”.

“At the time, I certainly thought it would be useful and create jobs in the digital economy, but did not imagine its impact as a cornerstone of internet law allowing for the existence of social media and numerous other types of online businesses,” he added.

Indeed, internet advocates credit Section 230 with enabling the web we have today, in all its diversity.

“What does the internet look like in a non-Section 230 world?” asked Eric Goldman, a professor at Santa Clara University School of Law. “It looks like online classified ads. Think how much better our lives are because we have online marketplaces instead.”

Attempts to crack down on Airbnb

The internet may be governed by federal law, but the acceptable uses of an apartment or house (or any structure or piece of land) are very much the province of local governments, many of which either ban or curtail short-term rentals.

Almost all short-term rentals in San Francisco were illegal until 2014, unless the host obtained a permit to run an old-fashioned bed and breakfast. Even after the city legalized short-term rentals – if hosts registered with the city and followed certain rules – less than a quarter of the approximately 7,000 Airbnb hosts signed up. New York state law forbids renting an entire unit in an apartment building for fewer than 30 days, which means a significant percentage of short-term rentals in one of Airbnb’s largest markets are illegal as well.

As cities attempt to crack down on the bad actors, Airbnb is an obvious target. The company knows who is renting units, and when, and could much more easily discover and punish anyone breaking local rules than government workers can.

“It’s just shameful that when Airbnb knows that cities are struggling to maintain their stock of affordable housing and keep tenants in housing, that they refuse to work with cities and states to have their platform not be used for illegal rentals,” said New York state assembly member Linda Rosenthal.

Airbnb is not the first online platform to earn money off potentially illegal activity, to the consternation of local officials. Photograph: John Macdougall/AFP/Getty Images

The fact that Airbnb has the capacity to act on behalf of the government does not mean it should do so, however, argued Lee Tien, a senior staff attorney with the Electronic Frontier Foundation.

“We’ve always had intermediaries. Long before the internet came along, there was the phone company, and that was the place that cops and regulators would go to find out who was doing what,” Tien said.

“Imagine if the phone company were actually legally liable for everything that phone users said. The protection of intermediaries is very important to protecting any kind of privacy that we have.”

Airbnb is not the first online platform to earn money off potentially illegal activity, to the consternation of local officials. Several states have tried to crackdown on online sex work advertisements and online ticket scalping, only to run into Section 230.

“StubHub has been sued a gazillion times and there are a whole lot of people saying they are facilitating the circumvention of anti-scalping laws,” Tien said. “I suspect that the percentage of transactions on StubHub that violate some state’s anti-scalping law are pretty high, but that doesn’t matter because of Section 230.”



“The Communications Decency Act doesn’t render all business laws moot simply because a business happens to operate on the internet,” said Matt Dorsey, press secretary for the San Francisco city attorney, which will defend the city’s law at a hearing on 1 August.

Regulators versus the online marketplace

While San Francisco prepares to defend its bill in court, other cities are wading into the legal morass as well. The Los Angeles city council is considering regulations that also attempt to put Airbnb on the hook for ensuring the legality of its users listings.

If San Francisco’s law is thrown out by a judge, other cities may head back to the drawing board and try a new approach.

That’s typical for local regulators confronting a new online marketplace, Tien said. First, they go after the platform, then after they realize the limitations imposed by Section 230, they move onto another strategy.

“I’m hoping that we’re moving into the second phase,” he said, “into areas that will not run afoul of the values that 230 is trying to protect.”