Courts

Making the Civil Liberties Case for Airbnb


Updated to include a statement from the New York Attorney General's office in the seventh paragraph.

For the last month or so,  a fight has brewed over Airbnb in New York, focused primarily on whether the apartment-rental service should be legal. Now a subpoena handed down by New York State Attorney General Eric Schneiderman’s office, demanding information on everyone who rents space through the service, has earned Airbnb allies who want to debate the limits on government’s right to demand personal information from data-rich Internet companies.

The Electronic Frontier Foundation and the Center for Democracy & Technology, organizations focused on tech-related civil liberties issues, filed a friend-of-the-court brief supporting Airbnb’s petition to set aside the subpoena. This comes just days after the Internet Association, a tech trade group, did the same. Their arguments describe the subpoena as a fishing expedition in which the attorney general has neither shown evidence of wrongdoing nor tried to separate allegedly illegal activity from legal activity.

“At the end of the day, a subpoena needs to be tied to a specific thing,” says Michael Beckerman, president and chief executive of the Internet Association. ”It’s our personal liberty at stake. Government authorities have broad powers, and the courts need to be vigilant to make sure that these powers are applied reasonably.”

He acknowledged that some illegal activity may take place on the site but likened Schneiderman’s action to subpoenaing carmakers for data on who hasn’t been wearing seat belts. The difference? Airbnb has much deeper information about its users than Ford (F) does.

“Just because the technology collects the data and makes it easy to disclose doesn’t mean the government is entitled to it all,” said Gregory T. Nojeim, director of CDT’s Project on Freedom, Security and Technology, in a statement. ”Whether it’s a secret application from the NSA or a subpoena from a state official, courts need to reject or substantially narrow bulk data demands from government officials.”

Whether these arguments hold up in a courtroom has yet to be seen.Schneiderman seems in danger of being outmaneuvered in the court of public opinion. People have been hearing a lot lately about the threat that data-hungry governmental agencies pose to their privacy, and they probably dislike the notion that the state’s attorney general is collecting swaths of information about them.

For its part, the attorney general’s office takes issue with Airbnb’s description of the subpoena, saying that it is only seeking business transaction information, and only for people who rent space that they are not occupying at the time it is being rented. “Even Airbnb admits that its customers owe taxes on apartments they’re renting out for profit,” said Matt Mittenthal, a spokesman for the office, in a statement.

To the extent that the attention turns to civil liberties, it turns away from the potentially illegal nature of the economic activity that Airbnb facilitates. The company’s opponents are trying to keep the attention on the latter. Within hours of the Internet Association’s announcement that it was joining Airbnb’s side, State Senator Liz Krueger’s office began circulating an independent analysis of Airbnb’s business by Tom Slee, author of No One Makes You Shop at Wal-Mart.

In Airbnb’s discussion of its business, it never mentions the proportion of renters who aren’t present when guests are staying in their homes. This is important because this is what puts Airbnb rentals in violation of the state’s illegal hotels law. According to Slee, who downloaded thousands of Airbnb rental listings, 56 percent of listings are for entire apartments, suggesting that they violate the hotels law. He calculates that those listings account for 73 percent of company revenue. Almost half the company’s revenue comes from people who rent out more than one apartment.

“This shows what we’ve been saying all along—illegal hotels aren’t an abberration in Airbnb’s business model, they are Airbnb’s New York business model,” said Krueger, author of the state’s law governing illegal hotels, in a statement. Airbnb reiterated that 87 percent of people rent the homes in which they live, but didn’t directly respond to the issue of residents being present. “It is unfortunate that some people continue trying to pain a picture of the Airbnb community that is not informed by the facts,” writes Nick Papas, an Airbnb spokesman, in an e-mail.

These are uncomfortable facts that Airbnb will probably have to confront about its business at some point. Before the subpoena, changing the hotel law was its main priority; it is likely to again become the company’s focus soon. In the meantime, it must be happy to have a debate about all the ways in which Eric Schneiderman’s office resembles the National Security Agency.

Brustein is a writer for Businessweek.com in New York.

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