Yesterday, a Supreme Court judge in New York has ruled to block the subpoena issued by state Attorney General Eric Schneiderman over the running of illegal hotels that are being supported by Airbnb Inc. Schneiderman reportedly issued the probe to obtain information to find whether the San Francisco-based firm has allowed its users to run illegal home rentals. Acting Supreme Court Justice Gerald W. Connolly in Albany said that he needed to void the Schneiderman's subpoena as the information he is demanding included data like the hosts' names and addresses and other materials that are irrelevant to the state attorney general's inquiry.
Airbnb offers ad network services wherein users are allowed to post couch, bedroom or house rentals to interested travelers for a fee. Under a financing deal with TPG Capital, the company has managed to grow into a $10 billion company with listings across 34,000 cities all over the world.
Airbnb's business is threatened by the state of New York, thanks to the latter's regulations that prohibit individuals or entities to offer short-term rentals of whole private homes. According to critics, which include affordable housing advocates, Airbnb has caused the rental prices in the New York state to drive up. Supporters like the Washington-based Internet Association, on the other hand, claim that the San Francisco company's business has boost the local economy.
In an emailed statement, Schneiderman's spokesman Matt Mittenthal said, "(The judge) rejected all of Airbnb's arguments except for a narrow technical issue. Our office is committed to enforcing a law that provides vital protections for building residents and tourists alike."
Mittenthal said Schneiderman's office will be issuing a new subpoena as early as this week.
Airbnb spokesman Nick Papas said yesterday in a statement, "This decision is good news for New Yorkers who simply want to share their home and the city they love. We look forward to continuing to work with the Attorney General's Office to make New York stronger for everyone."
