'Smart' Lock Vendor Locks Hundreds Out Of Their Home With Bungled Firmware Update

from the sorry-I-can't-do-that,-Dave dept

So we've talked repeatedly about how the real "smart" choice in the era of "smart" internet of things devices is often -- dumber technology. Whether it's your smart refrigerator or TV leaking your gmail details or viewing data over unencrypted connections, your smart car opening the door to potentially fatal attack, or your smart doorbell creating new attack vectors into your WiFi network, more often than not you're quite frankly better off with the older, less sophisticated versions of these technologies if you want the smart path toward a more secure life.

The latest case in point: smart door lock vendor Lockstate managed to completely disable the smart door locks of an estimated 500 customers after a botched firmware update left customers unable to access their own properties:

A subset of smart locks made by Lockstate have been bricked after an update. The smart lock vendor is part of Airbnb’s Host Assist program, and integrates with the accommodation rental platform so, for instance, hosts can automatically generate and email one-time codes for their guests to use during check-in....Two models of Lockstate smart lock are apparently affected, one of which currently retails for $469.

Airbnb offers property owners a $50 discount code if they use Lockstate products as part of the Host Assist program — where said products are heralded as “revolutionary” and capable of withstanding “high usage”. Because the botched update made it impossible for these locks to subsequently connect to the internet for a new fix, the vendor is informing owners that their only recourse is to wait anywhere from a week to eighteen days for a physical replacement, inundating them with neither smart nor revolutionary added costs:

In the mass mailer email, which begins “Dear Lockstate customer” and summarizes its contents as an “update” pertaining to LockState 6i/6000i, affected customers are asked to wait as long as 18 days for a full replacement. Or up to a week if they choose to remove and send the back portion of the lock to the company for repair.

Feel smarter yet? Of course this isn't the first problem of this type. Internet of things brand darling Nest has, at several different points, botched their own firmware updates for supposedly smart thermostats, resulting in users either being cooked or chilled until they were able to remedy the problem. This is the kind of stuff internet of things evangelists still don't spend much time talking about when they're busy hyping and pitching the latest and greatest internet-connected widgets, built by a rotating crop of companies with a fleeting interest in actual security, functionality and privacy.

Granted bungled firmware updates are only one risk. A recent report took a look at sixteen different brands of Bluetooth-enabled smart locks, and found that at least twelve of the brands were notably susceptible to remote attacks. The flaws are fairly standard at this point, ranging from user data and passwords being transmitted in plain text, or a bungled use of encryption to transmit user data when encryption was used at all. Short version of the lesson: if you're trying to build a smart home either do your homework and consult a hacker to find the best quality devices available, or save both time and money and revert to the best available dumb alternative.

Filed Under: internet of things, iot, smart lock
Companies: airbnb, lockstate

How Congress' Attempt To Break CDA230 Could Kill Airbnb

from the liability-liability-liability dept

Earlier this week, we wrote about a dangerous bill to punch a giant hole in Section 230 of the CDA. We spent a lot of time in that post detailing how problematic the bill is and how it would actually be counterproductive to the stated goal of stopping human trafficking. But, beyond just being counterproductive to the stated goal, the bill would likely create fairly massive negative consequences for tons of internet companies. If anyone used any part of that company's products and services for trafficking, it would open up companies not just to liability, but to costly legal action, even if they're eventually vindicated.

And I wanted to dig into one example: Airbnb. As we've discussed in the past, Airbnb relies heavily on CDA 230, because otherwise, any time anything went wrong with an Airbnb hosted place, Airbnb would face potentially crippling lawsuits. And I'm thinking about Airbnb specifically, because of a recent ruling that Eric Goldman pointed out, in which Airbnb's largest competitor VRBO was saved by CDA 230. You can go over to Eric's blog to read the details, but the really short version is that someone booked a "luxury resort" via VRBO for a ridiculous sum of money, and the rental units never happened. The victims targeted VRBO with the lawsuit, but the court has none of it.

The plaintiffs claimed VRBO qualified as a “seller of travel services,” which would subject it to heightened regulation. The court disagrees: “HomeAway merely provides a venue for others to sell or provide lodging, but does not provide the actual facility where people can ‘lodge.'” See the uncited SF Housing Rights Committee v. Homeaway ruling. Further, if VRBO did constitute a seller of travel services, Section 230 would apply: “To hold HomeAway liable for misleading or inaccurate material (e.g., images from another property listing appearing on a different HomeAway website being duplicated on the VBRO.com Jewels of Belize rental account) in the third party created Jewels of Belize listing contravenes Section 230 of the CDA.”

To get around Section 230, the plaintiffs invoked VRBO’s “Basic Rental Guarantee,” which provides reimbursement for certain types of fraud (but doesn’t cover direct wire transfers like those at issue here). VRBO denied the reimbursement claim, concluding that the listing came from an authorized property owner and the property actually existed (but apparently had serious problems). The court says VRBO did what it promised to do in the “guarantee.” The fact VRBO used the term “guarantee” (a term I wouldn’t have chosen personally) didn’t convert the reimbursement promise into something more.

Now, there's a somewhat reasonable argument to be made that it would be smart business strategy for VRBO to handle the situation better and to reimburse these people. But making the company legally liable is another story.

So, now let's get back to SESTA, the bill that was released earlier this week. Surely, some of you are thinking, that's not a big deal for Airbnb? After all, everyone's just talking about how it's designed to takedown Backpage (ignoring that Backpage already shut down its adult section, and current law already lets the DOJ go after Backpage if it violated federal trafficking laws). And Airbnb isn't Backpage. But... there actually have been a whole bunch of stories this year claiming that prostitutes are now using Airbnb. And, with some folks trying to conflate prostitution with trafficking, is it any stretch of the imagination to think lawyers will start suing Airbnb, claiming it's violating federal anti-trafficking laws?

As Eric Goldman asks in his post:

In light of that, how would Airbnb and VRBO change their behavior to reduce their potential liability for sex trafficking pursuant to the proposed bills? Heck if I know, and I doubt Congress knows either.

Put yourself in the shoes of Airbnb and tell me: how would you completely rule out that anyone could possibly abuse the Airbnb service for trafficking? It's... not easy. This doesn't mean Airbnb wants this activity to happen via it's platform. I'm 100% sure that it does not. It would be thrilled if there were an easy to way to stop it. But... it's not. Like, this is a basic impossibility. And yet, if it happens, then suddenly the companies themselves could be liable for criminal activity. Criminal activity that was done by others, that Airbnb would have no effective way to stop, short of shutting down the site or doing something ridiculous and drastic. That... seems like a pretty big overreaction. Yes, trafficking is a problem, but this bill is sending a wrecking ball through the internet as it seeks out one particular company.

And, yes, I get that some people don't like Airbnb, so maybe they're fine with this kind of collateral damage, but Airbnb is just one example here. Plenty of other sites that you probably do like will face similar problems. This is a bad bill that won't even help with its stated goals, but will create serious problems for people around the globe.

Filed Under: cda 230, intermediary liability, liability, prostitution, section 230, trafficking, unintended consequences
Companies: airbnb, vrbo

Why Is The Hotel Industry More Focused On Harming Airbnb Than Improving Their Own Product?

from the innovate-and-compete,-guys dept

It's no secret that the hotel industry hates competition from Airbnb. Hell, politicians have even admitted to crafting anti-Airbnb policies to keep hotels from being disrupted. But, now, the NY Times has got its hands on a specific plan from the hotel industry to basically hamper Airbnb and burden it with legal and policy challenges (I should note, by way of some sort of disclosure, that I'm typing this while sitting at a desk at an Airbnb apartment in Washington DC -- and, similarly, that it's much nicer and significantly cheaper than comparable hotels, but I digress...).

Last year, Airbnb underwent a rough regulatory patch.

The short-term rental company became a Federal Trade Commission target last summer after three senators asked for an investigation into how companies like Airbnb affect soaring housing costs. In October, Gov. Andrew M. Cuomo of New York signed a bill imposing steep fines on Airbnb hosts who break local housing rules.

The two actions appeared unrelated. But one group quietly took credit for both: the hotel industry.

Years back, we wrote about writer Andy Kessler's concept of political entrepreneurs v. market entrepreneurs, which (loosely defined) were those who basically used policy making to lock up markets for themselves and restrict competitors as opposed to entrepreneurs who innovated and created more value in the market by serving customers. In more traditional economics, it's rent seeking v. market innovation and growth. Most people recognize how rent seeking is bad: it's using the levers of regulations and politics to limit competition and innovation, in order to extract a greater share of the revenue/profits (since there's less competition, if any) while similarly limiting innovation and economic growth that improve people's lives.

And the hotel industry seems like a prime example of this right now.

Both were partly the result of a previously unreported plan that the hotel association started in early 2016 to thwart Airbnb. The plan was laid out in two separate documents that the organization presented to its board in November and January. In the documents, which The New York Times obtained, the group sketched out the progress it had already made against Airbnb, and described how it planned to rein in the start-up in the future.

The plan was a “multipronged, national campaign approach at the local, state and federal level,” according to the minutes of the association’s November board meeting.

The NY Times report has many more details, but all of it is basically summed up as "annoy Airbnb and limit their ability to grow as much as possible." There doesn't appear to be anything in there about "providing a better experience to our customers so they might prefer us to Airbnb." There doesn't seem to be anything in there about "better competing with Airbnb." Nope, it's entirely about trying to undermine Airbnb. I've noted in the past (and in this post!) that I've used Airbnb a bunch, and have found it almost universally better than hotels. The experience is more unique, but also just... better overall. And I've spoken with many Airbnb hosts. It's true that some are running "businesses" renting out multiple units on Airbnb, but isn't opening up more people for running successful small businesses a good thing?

And, yes, I know lots of people like to claim that Airbnb is driving up rent -- even if the data doesn't currently support that claim. But even if true (and, again, it's the hotel lobby that has mostly been pushing this narrative, though plenty of well meaning folks have picked up on it), that's an issue to deal with in other ways (such as increasing housing stock, rather than limiting it with other regulations) rather than shutting down a useful business that opens up new opportunities, and can also increase tourism and local business.

Again, it's perhaps no surprise that the hotel industry has been fighting Airbnb, but with the NYTimes getting its hands on the actual strategy documents from the hotel industry, that industry has made it clear that it's seeking to shut down and limit competition, rather than innovate themselves.

Filed Under: competition, hotels, innovation, political entrepreneurs, rent seeking, startups
Companies: airbnb

Miami Officials Promise To Crack Down On Airbnb Homeowners Who Spoke Up About Bad Regulations

from the that's...-a-problem dept

For a few years now, we've written about various local governments and their pointless wars against Airbnb, which are often driven by lobbying from the big hotels. Different governments take different approaches, but Miami apparently has an incredibly restrictive regulation that effectively bars short term rentals entirely. Even worse, the mayor has been pushing to make things even worse. Since the current law only is enforced in response to complaints, mayor Tomas Regalado is pushing a plan to more proactively hunt down homeowners who offer short term rentals on Airbnb.

And here's where things get... sketchy. There was a hearing and a vote about this plan recently, and a bunch of Miami homeowners went to City Hall to speak out against this plan. Of course, in order to speak before the Miami commissioners considering this, they had to first identify themselves. The commissioners, apparently unswayed by these homeowners or by Airbnb itself, voted 3 to 2 to move forward with the plan (and also threatened to sue Airbnb directly...). But perhaps most ridiculous of all, the city is now looking to go after the homeowners who spoke at City Hall. After all, they identified themselves as homeowners using Airbnb:

“We are now on notice for people who did come here and notify us in public and challenge us in public,” said City Manager Daniel Alfonso. “I will be duly bound to request our personnel to enforce the city code.”

That sounds an awful lot like punishing Miami residents for speaking out on a matter of public interest. Yes, you can argue that they were admitting to breaking current local ordinances, but it certainly feels pretty sketchy to then directly target them. It is basically broadcasting the fact that no one is allowed to present the other side, and to describe how short term rentals might be beneficial to the city.

Filed Under: daniel alfonso, miami, regulations, short term rentals, tomas regaldo
Companies: airbnb

Court Not Impressed By Airbnb's Argument Against The City Of San Francisco

from the well,-that's-a-problem dept

Earlier this year, we noted that a bunch of cities were looking to make Airbnb liable for residents in those cities using the platform without following certain city rules. As we noted at the time, this seemed to pretty clearly violate Section 230 of the CDA, which says that platforms cannot be liable for the actions of their users. San Francisco went ahead with such a law anyway, even though it tried to rework it at the last minute to deal with Airbnb's points on why it was illegal. The case ended up in court either way -- and unfortunately, the initial ruling has sided with San Francisco over Airbnb.

Now, I know that for a variety of reasons, there are people who just flat out hate Airbnb and think that it's somehow bad or problematic for cities or rental prices or whatever. I don't think the data supports this, but either way, you should be concerned about the results here. This isn't about whether or not Airbnb is "good" or "bad" for cities. It's about a fundamental principle on which the internet operates -- which has allowed the internet to grow and to thrive, and which has protected free speech on the internet, by not making platforms magically liable for what users say or do. But the court here basically doesn't care about all of that.

The judge tries to carefully parse things out to argue that under this law, Airbnb isn't liable for its users' actions, but its own:

As the text and plain meaning of the Ordinance demonstrate, it in no way treats plaintiffs as the publishers or speakers of the rental listings provided by hosts. It does not regulate what can or cannot be said or posted in the listings. It creates no obligation on plaintiffs’ part to monitor, edit, withdraw or block the content supplied by hosts. To the contrary, as San Francisco has emphasized in its briefs and at oral argument, plaintiffs are perfectly free to publish any listing they get from a host and to collect fees for doing so -- whether the unit is lawfully registered or not -- without threat of prosecution or penalty under the Ordinance.... The Ordinance holds plaintiffs liable only for their own conduct, namely for providing, and collecting a fee for, Booking Services in connection with an unregistered unit.

But that misunderstands both the nature of the platform and the nature of Section 230. First of all, the law absolutely creates an obligation on Airbnb to monitor, withdraw or block the content supplied by hosts -- because if they do not, then they will face significant liability. The idea that it's only targeting Airbnb's "conduct" of booking an unregistered unit is simply incorrect. The platform allows anyone to put up any unit. Not Airbnb. Not only does this new regulation falsely attribute to Airbnb the actions of its users, this judge does too. That's a problem.

We've written a lot about Section 230 over the years, and unfortunately in the last few months a bunch of cases have chipped away at these important protections. In each case, the courts seem to think that the situation in front of them is somehow unique and Section 230 shouldn't apply. Considering how important Section 230 has been to the internet as a whole and the protection of free speech, we should be very, very concerned about so many of these cases picking apart the law and adding serious liability. It won't end well. Hopefully Airbnb appeals this... and the 9th Circuit doesn't muck it up.

Filed Under: cda 230, intermediary liability, liability, san francisco, section 230
Companies: airbnb

Calm Down, People: Data Shows Airbnb Isn't Really Driving Up Rent

from the not-that-bad dept

Last year, we did an episode of the Techdirt podcast discussing whether or not Airbnb was good or bad for cities, and afterwards I heard from a few people insisting that we were too quick to dismiss the concerns of the anti-Airbnb crowd. It seemed to us that the problem, if there was one, was in the overall housing stock of cities, rather than Airbnb having a legitimate impact. Yes, certainly there are some people who just use some homes/apartments/condos for doing short-term rentals, but it was difficult to see how (even at Airbnb's scale) it was enough to significantly impact housing prices.

And now there's some data to back that up. FiveThirtyEight did an analysis going through the data from a consulting firm, Airdna, that obviously collects a ton of Airbnb data, and it found little evidence that it's impacting housing prices in any significant way. The analysis does note that while such "commercial" listings (i.e., places that are only used to rent out on Airbnb, rather than for someone's actual residence) make up only about 10% of the site's total listings, they do make up about 1/3 of its revenue. That also shouldn't be that surprising. Of course places that rent out continuously are going to make more revenue. But, either way, there really just aren't that many such listings:

The revenue numbers alone don’t necessarily mean Airbnb is having much effect on rents in the cities where it operates. That is because the raw number of commercial units in most cities remains low, under 1,000 in all but the biggest cities. Even in New York, Airbnb’s biggest U.S. market, the service had only about 2,500 commercial listings, a sliver of the city’s roughly 2.2 million total rental apartments.

The 538 report keeps hedging this conclusion by saying "but, well, the rate of commercial listings is growing..." but it's still not clear that it's having a major impact on housing prices. And, again, if it is then that seems to be a sign that the focus should be on increasing overall housing stock, as things like Airbnb can provide plenty of other benefits for residents as well -- from alternative revenue sources for homeowners to more tourist dollars coming in to cities. But, overall, it seems like the rush to blame Airbnb for rising rental prices and costs for housing is overblown.

Filed Under: home sharing, rent, short term rentals
Companies: airbnb

Airbnb Goes To Court To Stop San Francisco's New Anti-Airbnb Law

from the section-230 dept

Back in May, we noted that large cities around the country were rushing to put in place anti-Airbnb laws designed to protect large hotel companies. In that post, we noted that many of the bills almost certainly violated Section 230 of the CDA by making the platform provider, Airbnb, liable for users failing to "register" with the city. Section 230, again, says that a platform cannot be held liable for the actions (or inactions) of its users. San Francisco was the first city to get this kind of legislation pushed through. And while the city's legislators insisted that Section 230 didn't apply, they're now going to have to test that theory in court. Airbnb has asked a court for a preliminary injunction blocking the law, based mainly on Section 230, but also mentioning the Stored Communications Act and tossing in a First Amendment argument just in case.

As designed and drafted by the Board of Supervisors, the Ordinance directly conflicts with, and is preempted by, Section 230 of the Communications Decency Act, 47 U.S.C. § 230 (the “CDA”). According to its own sponsors, the law holds “hosting platforms accountable for the hundreds of units (rented by) unscrupulous individuals” posting listings on their websites, and holds “Airbnb Accountable for Listing Illegal Short Term Rentals.” Declaration of Jonathan H. Blavin (“Blavin Decl.”)... As such, the Ordinance unquestionably treats online platforms like Airbnb as the publisher or speaker of third-party content and is completely preempted by the CDA. In addition, the law violates the Stored Communications Act, 18 U.S.C. §§ 2701 et seq. (the “SCA”), by requiring disclosure to the City of customer information without any legal process, and the First Amendment as an impermissible content-based regulation.

As Airbnb points out, the city even recognized that the bill probably runs afoul of Section 230, but signed it into law anyway:

The City was not blind to the fact that the Ordinance might run afoul of the CDA and other laws. Following its passage, the Mayor’s office said that the “mayor remains concerned that this law will not withstand a near-certain legal challenge and will in practice do nothing to aid the city’s registration and enforcement of our short-term rental laws.” ... The City Attorney’s Office acknowledged that the Ordinance could raise “issues under the Communications Decency Act” but claimed that it had been drafted “in a way that minimizes” those issues by regulating “business activities” instead of “content.” ... Despite the City’s best efforts to tiptoe around the CDA through such semantic devices, the problem for the City is that the substance of what the Ordinance seeks to do violates the CDA. No amount of creative drafting can change that reality.

The Stored Communications Act argument involves the requirements of Airbnb to turn over information on its users. The SCA is a part of ECPA, the Electronic Communications Privacy Act, that is supposed to protect the privacy of electronic communications (though, it's in deep need of an update). Here, Airbnb points out that the city ordering it to release customer information almost certainly violates the SCA.

The verification provisions of the Ordinance separately are barred by the SCA. In a futile effort to sidestep the CDA, the Ordinance requires Hosting Platforms to verify listings by disclosing to the City host names and addresses “prior to posting” a listing—and without a subpoena.... But in this failed endeavor to avoid Section 230, the Ordinance runs smack into the SCA, which bars state laws that compel online services like Airbnb to release customer information to governmental entities without legal process.

The First Amendment argument is basically a backstop in case the CDA and SCA arguments fail, and then there's a Constitutional argument to appeal. If the court deals with the case on CDA and SCA grounds, it probably will avoid the First Amendment question altogether. But, the basis is that regulating types of advertisements on Airbnb's platform is a form of a content-based restriction on speech. And there is a strong argument that in restricting the content on the platform, rather than merely punishing the people who post their content to Airbnb, that the law violates the First Amendment. There are exceptions but, generally speaking, the First Amendment doesn't like any law that blocks out speech entirely, even if it's commercial speech.

The Ordinance also violates Hosting Platforms’ First Amendment rights. The prohibition on the publication of certain rental advertisements—i.e., those listings without verified registration numbers—is a content-based speech restriction subject to “heightened judicial scrutiny” under the First Amendment.... The City cannot meet its burden of demonstrating that this speech restriction directly advances a substantial state interest and does so in a narrowly tailored way. Even assuming the Ordinance actually advances a substantial state interest (which is questionable), it places a far greater burden on speech than is necessary to achieve that end. The “normal method of deterring unlawful conduct” is to punish the conduct, rather than prohibit speech or advertising regarding it.... The City cannot show that the obvious alternative of enforcing its existing laws against third-party residents who rent properties in violation of the law, rather than against Hosting Platforms, would be ineffective or inadequate. Just the opposite: it is clear the City could enforce its laws directly against hosts who violate them—as it already has begun to do with increasing effectiveness and success—rather than indirectly against Hosting Platforms that publish listings. Further, the law is unconstitutionally overbroad as it punishes platforms for publishing any listing without complying with its “verification” procedures—including those listings that may be lawful.

Whatever you think of Airbnb (and people seem to get more emotional about it than seems reasonable...), this lawsuit could become quite important in making sure that Section 230 remains strong in protecting internet services providing useful services to individuals. In the past month or so, we've seen a number of questionable Section 230 rulings (especially in California) that have started to chip away at this law. However, I don't see how any of those rulings directly apply to this case. The most direct comparison is probably the Model Mayhem case but, in that case, the court was clear that it allowed the California law requiring the platform to "warn" users to stand in part because it did not require the platform "to remove any user content or otherwise affect how it publishes or monitors such content." That's clearly not the case with this Airbnb law.

Either way, this is a case worth following, and hopefully one where the courts don't lop off another chunk of Section 230's protections (or, for that matter, the SCA's privacy protections).

Separately, there's a very, very bizarre NY Times article about this, falsely claiming that Airbnb is suing over a law it helped pass. That's just wrong. It's really bad reporting. Airbnb is clearly suing over the new language voted in by the SF Board of Supervisors earlier this month, and not the broader law that passed a few years ago.

Filed Under: cda 230, first amendment, intermediary liability, platforms, privacy, san francisco, sca, stored communications act
Companies: airbnb

NY Legislature Rushes Anti-Airbnb Legislation; Likely In Violation Of Federal Law

from the states-still-learning-230 dept

A few weeks ago, we wrote about how legislators in various cities (mainly SF, Chicago and LA) were trying to push through anti-Airbnb legislation that would require homeowners doing short term rentals to register with the city -- and which would hold the platform (Airbnb) liable if its users failed to do so. As we noted, that almost certainly violates Section 230 of the CDA, which bars any law that attempts to hold a platform liable for the actions of its users. At least in San Francisco, the Board of Supervisors ignored all of this with a city attorney claiming (incorrectly) that since it regulates "business activities of platforms," it's not regulating the content on those platforms. That's an... interesting dodge on the Section 230 issues. It seems unlikely to hold up in court, but California's been especially wacky on CDA 230 lately. The SF legislation has since passed, and it will be interesting to see if anyone (i.e., Airbnb) decides to challenge it in court.

Meanwhile, over in NY state, it seems that they're bringing out an even bigger and more clueless anti-Airbnb sledgehammer. It's a proposed bill that would bar Airbnb using homeowners from "advertising" short term rentals of their properties. They put it in SCREAMY LETTERS mixed with legalese:

PROHIBITING ADVERTISING THAT PROMOTES THE USE OF DWELLING UNITS IN A CLASS A MULTIPLE DWELLING FOR OTHER THAN PERMANENT RESIDENCE PURPOSES. IT SHALL BE UNLAWFUL TO ADVERTISE OCCUPANCY OR USE OF DWELLING UNITS IN A CLASS A MULTIPLE DWELLING FOR OCCUPANCY THAT WOULD VIOLATE SUBDIVISION EIGHT OF SECTION FOUR OF THIS CHAPTER DEFINING A "CLASS A" MULTIPLE DWELLING AS A MULTIPLE DWELLING THAT IS OCCUPIED FOR PERMANENT RESIDENCE PURPOSES.

Basically: you can't use Airbnb to rent out your home for a short period of time and make some extra money because NY legislators don't want to upset the hotel business. Violating the law for Airbnb users can lead to increasing fines ($1,000 for first offense, $5,000 for a second and $7,000 for each additional violation). While a quick reading of the bill appears to focus on the homeowners, it can also be read to apply to Airbnb itself. Because the definition of "advertise" includes any "WEBSITES" that are "INTENDED OR USED TO INDUCE, ENCOURAGE OR PERSUADE THE PUBLIC TO ENTER INTO A CONTRACT FOR GOODS AND/OR SERVICES." (Sorry for the screamies, which are in the original).

Apparently, NY legislators are rushing this bill through. The fact that it can go after Airbnb almost certainly violates Section 230 yet again, but a bigger deal is just how ridiculous this is for anyone in NY who wants to make use of Airbnb. Airbnb is a very useful platform for both homeowners and travelers. It's helpful for the tourism industry and creates a bunch of benefits. It's not perfect, but this kind of bill would effectively kill off a lot of the usefulness of Airbnb. And for what? The message the NY legislature would be sending is "innovation is not welcome in NY." As Julie Samuels wrote in the NY Daily News:

But rather than making it easier to bring this home-sharing consensus to New York and preserve the innovative possibilities in the sharing economy, the legislation in Albany threatens to foreclose productive conversations about a comprehensive regulatory environment for startups like Airbnb. Episodes like these — where New York’s leaders risk signaling that they are not interested in listening to what tech companies have to say — are precisely the kind of stories that loom large in the minds of entrepreneurs and hurt job growth.

What’s worse is that this bill does nothing to address legitimate concerns about home-sharing, or to support tech companies’ efforts to crack down on illegal hotel operators who seek to remove housing from the market. Instead, it sets a bullseye on thousands of middle-class New Yorkers by imposing fines of up to $7,500 for advertising their homes on networks such as Airbnb’s.

It's amazing how often politicians seem to want to attack, rather than nurture innovation that's helping their constituents.

Filed Under: advertising, cda 230, intermediary liability, new york, section 230, short term rentals, temporary housing
Companies: airbnb

Cities Rushing To Restrict Airbnb Are About To Discover That They're Violating Key Internet Law

from the bad-ideas dept

Fights over tech policy are going increasingly local. Most technology regulations have been federal issues. There have been a few attempts to regulate on the state level -- including Pennsylvania's ridiculous attempt to demand ISPs filter out porn in the early 2000s. But state legislators and Attorneys General eventually learned (the hard way) that federal law -- specifically CDA 230 -- prevents any laws that look to hold internet platforms liable for the actions of their users. This is why state Attorneys General hate Section 230, but they need to deal with it, because it's the law.

It's looking like various cities are now about to go through the same "education" process that the states went through in the last decade. With the rise of "local" services like Uber and Airbnb, city by city regulation is becoming a very, very big deal. And it seems that a bunch of big cities are rapidly pushing anti-Airbnb bills that almost certainly violate Section 230 and possibly other federal laws as well. In particular, San Francisco, Los Angeles and Chicago are all pushing laws to further regulate platforms for short term housing rentals (and yes, the SF effort comes just months after another shortsighted attempt to limit Airbnb failed).

The bills basically look to force people who want to use platforms like Airbnb to register, but then look to hold the platforms liable if a renter does not include the registration info in their profile. Gautam Hans does a nice job in the link above outlining why San Francisco's proposed bill -- which will be voted on shortly -- clearly would fail to survive a Section 230 challenge:

This imposition of liability clearly goes against Section 230, which states in (c)(1) that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” — meaning that, if an information content provider, typically an individual user, posts something illegal, the interactive computer service, typically a website, can’t be held liable for it. Moreover, under (e)(3), “no liability may be imposed under any State or local law that is inconsistent with this section.” States and localities can pass laws that are consistent with Section 230, but anything inconsistent with Section 230 — like the imposition of liability on a website operator for user-generated content — is unlawful. From a logistical perspective, this makes a great deal of sense. If states and cities could enact a variety of conflicting laws, the whole point of Section 230 would be undermined. As a global medium, the internet wouldn’t work if it were subject to piecemeal regulations by every state and city within the US.

Hans also points out that the Chicago proposal (which is ~50 pages!) is equally bad:

The other recent proposal, from Chicago, creates similar issues by holding platforms liable for user content. Like the San Francisco proposal, it uses fines as the leverage to require platforms to ensure that listings on a platform have been approved by the city. And, as with the San Francisco proposal, the architecture of the liability structure runs afoul of Section 230’s preemption clause. The problematic language in this legislation, Section 4-13-250, states “It shall be unlawful for any licensee … to list, or permit to be listed, on its platform any short term residential rental that the commissioner has determined is ineligible for listing”; the penalty for violations, in Section 4-13-410, is “a fine of not less than $1,500.00 nor more than $3,000.00 for each offense. Each day that a violation continues shall constitute a separate and distinct offense.” This essentially creates a strict liability regime for website operators based on third-party content: if a user uploads a non-compliant rental listing, the site operator would immediately be in violation of this provision, regardless of whether they were aware of the posting or its ineligible status. No matter what the amount the potential fine is, this imposition of liability clearly contravenes Section 230.

Hans doesn't cover the LA law, but it's just as problematic (potentially more problematic!). Like the SF and Chicago bills, the focus is on requiring registration, and then puts liability on the platforms:

Hosting Platform Requirements.

(1) Actively prevent, remove and cancel any illegal listings and bookings of short term rentals including where a listing has been offered: without a Home-Sharing registration number; by a Host who has more than one listing in the City of Los Angeles; or, for a rental unit that exceeds 90 days in a calendar year.

Yes, sure, cities are concerned about how Airbnb can impact the way cities are run -- though over and over again we've seen evidence that Airbnb can be super helpful to cities in terms of increasing tourism and opening up new ways for people to earn money. But, if cities want to target questionable practices, they should do so by targeting the actual questionable practices, not by trying to skip around Section 230 and pretending it doesn't exist. I'm sure, as with the state AGs, we may hear city officials whine about how terrible Section 230 is and how it gets in the way of them "protecting citizens" or whatever they're going to claim, but those claims are silly. Section 230 is about properly targeting liability. When you point the liability in the wrong direction -- at platforms -- you reduce innovation and chill useful services. As Hans notes:

Enforcing the laws of a city or state is an important goal, especially when those laws are designed for compliance, safety, and non-discrimination. Yet it is equally important to ensure that the internet remains an open platform for innovation and exchange, which requires ensuring that intermediaries are not held legally responsible for content they did not author. In enacting Section 230, Congress ensured that this value would be the law of the land, and it is important that cities and states abide by superseding federal law.

One would hope that the cities in question would recognize the legal problems with their own bills before they decide to move forward on any of them. Otherwise, they're just going to end up wasting a ton of taxpayer money when someone takes these to court, and the cities inevitably lose, just as the states did a few years ago.

Filed Under: cda 230, chicago, cities, intermediary liability, los angeles, san francisco, section 230, short term rentals
Companies: airbnb

Airbnb's Tone Deaf Ads Are Absolutely Terrible... But The Proposition They're Protesting Is Worse

from the no-one-looks-good-here dept

So people living in San Francisco went sort of ballistic on the internet yesterday expressing outrage at a bunch of truly tone deaf ads from Airbnb, which were clearly an attempt to push against an upcoming proposition vote in San Francisco (Prop F) that would limit the ability of homeowners to rent out their homes via Airbnb. To start off, let's be clear: these ads are terrible. They're basically all premised on the fact that under existing law, taxes paid by Airbnb users (not Airbnb...) to the city from their rentals equals about $12 million. It's a valid point that Airbnb contributes to the city tax revenue, but the way in which Airbnb decided to demonstrate it simply reeks of entitlement, with each one basically asking for "more" for their $12 million, including from libraries. If you can't read that, it says:

Dear Public Library System,

We hope you use some of the $12 million in hotel taxes to keep the library open later.

Love,
Airbnb

Most of the other ads are based on a similar theme. Julia Carrie Wong at SF Weekly has collected a bunch of images as has Sarah Jeong at Vice's Motherboard (link above). Here are just a few:

@sarahjeong There's one about planting trees at Masonic & Haight. pic.twitter.com/9n8NDfsCvh

— Chris Arvin (@meinhyperspeed) October 22, 2015

@sarahjeong @juliacarriew another @Airbnb sign at Oak and Stanyan directed at SF Recreation and Parks pic.twitter.com/CeVUVHJBY0

— Urvi Nagrani (@theurv) October 22, 2015

@kimmaicutler @gamoid @ashleymayer pic.twitter.com/Wl7bEtHtIH

— Kyle Huey (@khuey_) October 22, 2015

How the who what I can't why pic.twitter.com/LgR4qYNbuG

— Sarah Fine (@fineplanner) October 21, 2015

It's not hard to realize how these ads came about. People who dislike Airbnb have been er... quite vocal in their arguments about how it's destroying the city (and by "destroying" they generally mean "changing.") It's not even clear how much Airbnb is really impacting things, as there are many, many other issues that are creating much bigger problems with housing in San Francisco, but it's not crazy to suggest that Airbnb had at least played some role in the change. Whether or not that kind of change is "good" or "bad" pretty much depends on your own perspective and how it impacts your own life. But, still, given all the hatred raining down on Airbnb, the company quite reasonably felt that it was unfair, given that activity on the platform has contributed in other ways, including city taxes. And that led people to think, "we should highlight the good side of Airbnb," including the taxes. And somewhere around that point, things went off the rails and someone had the awful decision to "highlight" it by acting all entitled about those taxes. When one of the chief criticisms of your startup is that you often act entitled in how you run your business, it's probably not a good idea to post entitled advertisements... especially ones that can be read to be attacking libraries and other public works.

Airbnb, after an initial PR snafu in which it totally didn't realize that people might be offended by such ads, agreed to pull them down. But the raging against Airbnb has continued, and there's at least a decent chance that the campaign has backfired in a massive way, pushing more people to vote for the proposition.

And that's a problem, because as bad as Airbnb's ads are, Prop F is much, much worse. Last month, "Emey" posted a pretty thorough discussion on Medium, walking through the bill and explaining why it's really, really bad. Yes, it's directly targeted at Airbnb, and so Airbnb haters like it. But... they shouldn't. The only parties Prop F really helps are the big hotels. And while I guess some people would like to keep the "tourist element" out of their neighborhoods and apartment buildings, there are lots of other issues with Prop F. A huge concern is the private right of action that allows anyone living within 100 feet of your residence to basically take you to court under accusations that you're violating the law. If you don't think this will be abused by neighbors trying to annoy other neighbors, you haven't witnessed a neighbor dispute gone bad. It happens all too frequently, and giving people another tool to turn a neighbor dispute into a legal fight is a really bad idea.

Airbnb has somewhat exaggerated this private right of action, by claiming that it's about getting neighbors to spy on neighbors, but that's not the really concerning part. It's the legal process that this makes it much easier for neighbors to saddle on other neighbors, even if they're not breaking the law. It's a mess and it will create many more problems between neighbors.

And then there's the separate question of what's so bad about Airbnb. Again, it does have the potential to create some change, but plenty of that change is positive. It helps subsidize the housing of many people who wouldn't otherwise be able to live in big cities. It has enabled many people to start small businesses or side businesses. It has created real competition for terrible hotels. It enables people to better experience new places outside of the traditional "tourist" hotel setup. In my personal experience, Airbnb has been a tremendous benefit to both hosts and travelers. Are there potential downsides? Absolutely. It can contribute to the changing nature of some neighborhoods. Since some people will stay when otherwise they'd be priced out, it can limit housing supply. Same for some landlords who are using properties solely as short-term rental units. But the real problem with that is overall supply restrictions in San Francisco (of which there are many -- and, weirdly enough, the same people protesting Airbnb seem to often be in favor of those other supply restrictions).

So, yes, Airbnb's ad campaign was terrible and tone deaf and reeked of entitlement. But don't support Prop F because of it. Prop F is worse. Much worse.

Filed Under: ads, entitlement, prop f, proposition f, san francisco, short term rentals
Companies: airbnb