The lawsuit could prove expensive for Airbnb. The law permits fines of 12,500 euros per illegal posting, which could leave the company paying nearly $14.2 million if every ad is deemed illegal.

In response, Airbnb told Reuters that it had taken steps to ensure visitors to Paris honor European law, but claimed the Parisian approach was "inefficient, disproportionate and in contravention of European rules." It's not going to quietly accept the allegations, then.

The firm might not have much choice but to pay out. Paris is Airbnb's single largest market, with 65,000 listings, while France is its second most important country. If the company defied the law, it would suffer a serious financial blow and would cede control of a major tourist destination to competitors like HomeAway. A fine might be a small price to pay if it keeps business humming.