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Airbnb Loses Major Fight Over California City's Rental Law

  • Appeals court rejects challenge citing internet immunity law
  • Ruling deals setback to Airbnb, HomeAway in fights with cities
Santa Monica, California.
Santa Monica, California.Photographer: Patrick T. Fallon/Bloomberg
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Airbnb Inc. and Expedia Group Inc.’s HomeAway failed to persuade a U.S. court of appeals to strike down a Santa Monica law that makes the companies liable for illicit rentals in the Southern California beach city.

The ruling Wednesday by a three-judge panel of the Ninth Circuit is a setback for the home-sharing platforms in their effort to avoid regulation by cities that blame the rapid proliferation of short-term rentals for a shortage of affordable housing and a disintegration of residential communities.