Airbnb’s Section 230 Use Underscores Law’s Reach Beyond Facebook
Home-rental site is caught up in political push to change internet shield even as its efforts to use law haven’t always worked
By Heather Somerville
Wall Street Journal
Jan. 10, 2021 12:00 pm ET
As lawmakers and tech executives prepare for a major battle over an internet liability shield this year, a look at Airbnb Inc.’s ABNB -0.30% use of the law shows that the stakes go well beyond social-media giants such as Facebook Inc. FB -2.69% and Twitter Inc. TWTR -5.47%
The home-rental site isn’t usually mentioned in the heated discourse over Section 230 of the Communications Decency Act, the 25-year-old legislation that has shielded internet companies from liability for what users post on their platforms.
But Airbnb has repeatedly sought protection under the law to avoid responsibility for listings on its site that several cities say violate local home-renting rules. It is actively lobbying in the political effort to reshape the law, even as the record shows that the company’s efforts to use it as a shield haven’t always been successful.
Top executives from tech companies including Facebook and Twitter have been compelled to testify several times in front of Congress over Section 230 and how they moderate content. That debate is sure to become more heated after Twitter banned President Trump’s personal account Friday, leading him to reissue a call to repeal Section 230 on grounds that it gives tech companies too much power.
Since 2016, Airbnb has cited Section 230 in seven lawsuits it filed in federal courts against local governments to avoid responsibility for listings on its site that violate home-renting laws. While Airbnb had wins against Anaheim, Calif., and New York City, in most cases the company lost its argument and faced a settlement compelling it to abide by some or all of the demands to take more responsibility for the listings on its website, according to court filings.
The result for Airbnb, which went public last month, has been tougher regulation, more expenses and less revenue in certain markets. Other technology platforms will likely encounter a similar outcome, according to legal scholars and tech investors.
Chris Lehane, Airbnb’s policy chief, said in an interview that regulating online content is a shared responsibility between tech companies, regulators and platform users. Airbnb said it is meeting its responsibilities by providing cities with the ability to monitor home-renting activity and assisting them with collecting occupancy taxes, among other things.
Mr. Lehane, a former Democratic political strategist, said that Airbnb hasn’t backed a specific bill to overhaul Section 230 but that new legislation including a notice-and-takedown mandate, which requires platforms to remove content once they are notified that it is illegal, is “a reasonable path forward.”
Airbnb has repeatedly sought protection to avoid responsibility for listings on its site that several cities say violate local home-renting rules. PHOTO: GABBY JONES/BLOOMBERG NEWS
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Passed in 1996 as part of the Communications Decency Act, Section 230 states that online platforms can remove content they deem objectionable while not being held liable for everything posted on their sites by third parties. That has allowed online marketplaces to have outside vendors and customer reviews without being held liable for harmful content. Companies have successfully used the law to protect themselves from liability for illegal gun sales, fake sports memorabilia and terrorist recruiting activities.
A repeal of Section 230 would leave Airbnb exposed to lawsuits over a negative review or a homeowner misrepresenting a house on the site.
U.S. lawmakers have proposed more than two dozen bills to change Section 230, with Democrats and Republicans airing different grievances. Many GOP lawmakers have contended that tech platforms have used the law to block conservative views. Democrats have argued that it has allowed companies to ignore false and dangerous information spreading online. President-elect Joe Biden has said the law should be “revoked, immediately.”
While Airbnb has repeatedly sought protection under the law, its efforts have demonstrated the shield’s limitations. In 2019, a federal appeals court upheld home-sharing rules in Santa Monica, Calif., deciding that Section 230 doesn’t cover online transactions such as home bookings. The ruling paved the way for more cities to craft and enforce tough home-renting regulations, according to law professors who studied the situation.
The decision made it “much easier for local governments to do whatever they want in terms of regulating Airbnb,” said Abbey Stemler, assistant professor of business law and ethics at Indiana University Bloomington, who co-wrote an amicus brief for the Santa Monica case.
Mr. Lehane said that the six cities and one county where Airbnb sued are outliers and that the company has willingly regulated listings on its platform without seeking Section 230 immunity in the majority of U.S. cities where it operates. But he didn’t rule out more lawsuits arguing for Section 230 protections when the company decides regulations are unfair to home-rental hosts.
Legal losses compelled Airbnb to create an operating framework that relied less on Section 230 for protection. In a May 2017 settlement with San Francisco, the company’s hometown, Airbnb agreed to build an online system for hosts to register their rental homes with the city and gave regulators data to police home-rental activity.
The settlement’s requirements put a dent in Airbnb’s business. By January 2018, Airbnb short-term home rentals in San Francisco had dropped by more than half, to about 3,500. Two years later, they had rebounded only slightly, to fewer than 4,000, according to city data.
This past fall Airbnb said it expanded that host registration system. A new web portal is now used by about 40 local and national governments and allows Airbnb to share data on rentals with regulators and assist them in enforcing local laws. Whatever changes might loom for Section 230, Mr. Lehane said Airbnb has demonstrated a potential model for similar platforms in the absence of some of its protections.
Airbnb’s business has proved resilient, and the company now boasts a market value of around $91 billion.
“Sophisticated companies can adapt,” said Ms. Stemler. “It’s clearly not the case that Airbnb will get crushed without blanket immunity” from Section 230.
Write to Heather Somerville at Heather.Somerville@wsj.com
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Appeared in the January 11, 2021, print edition as 'Airbnb Underscores Reach of Law That Shields Web Firms.'
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