A New York City law forcing Airbnb and HomeAway home-sharing platforms to reveal a "breathtaking" amount of information about their businesses seems unconstitutional, a judge decided Thursday, forcing the law to be shelved for now.
U.S. District Judge Paul A. Engelmayer made clear it wasn't a close call whether the law violates the Fourth Amendment's search and seizure provisions, though he only needed to find a more than 50 percent likelihood that the companies would win before suspending the law's Feb. 2 enforcement.
The ruling comes in an early stage of litigation, prior to the collection of additional evidence by both sides, but decisions written with the flourish that Engelmayer provided generally remain consistent until the case ends.
Under the law, companies would be required to reveal the names of hosts, among other information.
"The scale of the production that the ordinance compels each booking service to make is breathtaking," Engelmayer said of a law the city established last summer so it could crack down on illegal listings and impose fines. Companies would be required to reveal the names of hosts, among other detail.
He estimated that enforcement penalties could cost the companies hundreds of millions of dollars. If the law had been in effect in 2016, Airbnb would have had to produce user data regarding over 700,000 bookings, the judge noted.
Each company, he said, was expected to provide "what is effectively a wholesale replica of that booking service's database as to New York City users."
In the era prior to electronic data storage, such overreach would have been "unthinkable" because of the Fourth Amendment, the judge said.
He said if he let the law's enforcement proceed unchecked, the result could be far reaching because it would invite municipalities to make similar demands on other e-commerce companies for broad-ranging records of all users and customers.
By the city's logic, he said, the city could compel all online auction services to produce all sales records so investigators could find tax cheats or demand that all medical providers produce all patient records so law enforcement authorities could more easily locate health care fraud.
At a news conference, Mayor Bill de Blasio defended the law that requires companies to also reveal the addresses of hosts, and whether they're renting a room or the full apartment. Critics say the listings boost rents for New Yorkers by diminishing the quantity of rentable properties.
"''This is a law to stop landlords from creating de facto hotels, which is unfair and illegal, which creates real security problems for neighbors," the mayor said. He added that there was a lot of legal process ahead, and the city believes it will ultimately prevail.
In a statement, San Francisco-based Airbnb Inc. praised the ruling, calling it "a huge win for Airbnb and its users, including the thousands of New Yorkers at risk of illegal surveillance who use Airbnb to help make ends meet."
"The court today recognized the fundamental importance of New Yorkers' constitutional rights to privacy and the sanctity of their own homes," the statement said.
Lawyers for Homeaway.com Inc., based in Austin, Texas, did not immediately return a message seeking comment.