AirBnb Will Give New York the Data It Needs to Go After Illegal Hosts

New York's attorney general is dead set on being the AirBnb police, despite the fact that the metropolis sees more revenue from the sharing economy startup than any other city.

Today, Attorney General Eric Schneiderman got his wish. A settlement was reached in the ongoing legal spat between the two parties, in which AirBnb agreed to hand over anonymous data about its users to the AG's office so that law enforcement can suss out listings breaking the law in New York.

That's a lot of New Yorkers—two-thirds of the listings, according to a third-party data analysis. Some are bad actors beyond a doubt exploiting the travel website to break the law, running de facto off-the-books hotels through multiple AirBnb listings, and even, it was discovered, using the site for prostitution.

But many more are everyday New Yorkers looking to make a buck by renting out their primely located apartment when they take a long weekend out of town. Anyone renting their entire apartment for less than 30 days is breaking the law. And the state now has a court-approved right to go after any illegal host, and to require AirBnb hand over personal data about individuals to help police sniff out violators.

In a small win for AirBnb, investigators won't get total free reign of private info, like hosts' street address and the rates they charge. AirBnb, after trying to squash the original subpoena for user data completely, agreed in the settlement to hand over data but keep names, phone numbers, and tax information anonymous.

However, if law enforcement can make the case that de-anonymized data is needed to track down lawbreakers, the company must comply. “We have reached an agreement that will protect the privacy of thousands of AirBnb hosts, while allowing the Attorney General to investigate bad actors and move us forward,” AirBnb wrote on its Public Policy blog today.

Now, it's reasonable to assume the city isn't going to come knocking on the door of the couple in Park Slope renting out their studio for 75 bucks a night when there are brothels being run from the AirBnb site. But it could, and that's a serious blow to AirBnb, considering the legal quarrel in New York could set a precedent for other cities around the world.

"We are going to pursue anyone who's running illegal hotels," Schneiderman told the Associated Press today. "We view this as a template for other places in the country where the issue has been raised.”

As AirBnb becomes more and more popular, tourist cities around the globe will have to balance the new sharing economy travel paradigm with the fact that it doesn’t necessarily fit nicely with current hospitality or rental laws.