Airbnb files lawsuit against New York

Airbnb is officially on bad terms with New York.

The home-sharing company filed a lawsuit Friday against city and state parties after New York Governor Andrew Cuomo signed into law a bill that imposes hefty fines on anyone who posts a technically illegal short-term rental on Airbnb.

Airbnb hosts who advertise apartments on Airbnb that violate another law that bans rentals of whole apartments in shared buildings for fewer than 30 days can be fined as much as $7,500.

Airbnb threatened a lawsuit in September over the bill, and the company followed through on its promise Friday. A Hail Mary effort by Airbnb to stop Cuomo from signing the law this week by promising major changes in New York City wasn't enough.

“This is an issue that was given careful, deliberate consideration, but ultimately these activities are already expressly prohibited by law,” Cuomo spokesman Rich Azzopardi said in a statement to the New York Times.

Airbnb has been fighting this bill since it passed in June. The company tried to rally its New York hosts to lobby against the impending legislation. Despite the company's best efforts, the anti-advertising bill is now law throughout New York state.

The bill is the work of lawmakers and critics who claim Airbnb is disruptive to New York and eats up the city's affordable housing. While Airbnb has mainly faced these critiques in New York City, the law applies to the entire state.

Enforcement of the law could be disastrous for Airbnb. New York City is one of the company's most lucrative markets, with more than 40,000 listings concentrated there. About half of those are for entire homes, and any of those listings that are in buildings with several apartments would now incur a fine under New York's law.

Airbnb won't be fined directly. The financial burden will instead fall on New York hosts.

Airbnb said on Friday that it would explore "a range of different product and policy solutions" that will allow New York hosts affected by the law to list their properties while the company pursues its case against the city and state. The company also said that it would not change its website for New York listings, and that there is "no way" the law can be reflected on its platform.

The company, valued at $30 billion, is already tied up in a suit against San Francisco. Other cities around the world, including Berlin, Barcelona and Amsterdam, are questioning the use of short-term rentals, too.

While Airbnb's lawsuit could derail the state's legislation, Cuomo's signature on the bill sends a clear signal that New York will not tolerate the company's unchecked growth.

Airbnb claims the New York advertising law violates the First Amendment and the Federal Communications Decency Act.