Airbnb is contesting the claims made by the City of Paris on illegal advertisements on their portal. The company was sued for more than $14 million or 12.5 million Euros by Paris for posting more than 1000 rental ads illegally. The French law mandates that all homeowners who want to rent out their residences on rental platforms for a period of close to 3 months or 120 days should have a registration number provided by the local municipality associated in their advertisements. That helps to prevent owners from renting out their properties for a longer time. This law came into force in the year 2018, and rental companies like Airbnb will be fined 12,500 Euros for every ad posting that has no registration number.
Why this law?
The mayor of Paris Anne Hidalgo in an interview to a newspaper said that ‘the goal is to send a shot across the bows to get it over with unauthorized rentals that spoil some Parisian neighborhoods.’ This act comes after many European countries were concerned that companies like Airbnb are a threat to the hotel industry as it provides unfair competition and also can turn many neighborhoods in prominent cities to tourist-only places. All online platforms have to follow the EU consumer guidelines like offering transparent pricing details. Many countries have blamed Airbnb for rising in rental prices and also creating a housing shortage for locals.
What Airbnb says?
Airbnb a San Francisco based company which helps connect renters with property owners through their website says that the rules in Paris for tourist rentals for a short duration stay is highly bureaucratic and is noncompliant with the EU standards, even as Paris has asked the company to pay 12.5 million Euro fine for posting 1k illegal advertisements. France which is the next biggest market to the company after the United States has around 65k Paris homes listed and in response to the interview by Anne Hidalgo, a company spokeswoman in an email said that the terms set are ‘inefficient, disproportionate and against European Union regulations.’
Further, the company also argued that it had implemented the necessary measures along with many other rental platforms that offer short-time rental homes already so that homeowners in Paris can rent their homes in obeyance with the EU rules. The company spokeswomen said in a phone interview that ‘we hope to be able to work with all concerned players toward solutions that are suited to French cities and inhabitants.’