The city of Paris has won a landmark case against Airbnb after a court fined the apartment rental giant €8 million for allowing over 1,000 landlords to flout rental registration laws.

It was the latest clash between the U.S. rental platform and the French capital, with Airbnb accused of turning a blind eye to rule violations and exacerbating housing shortages, leading to higher property prices.

The case was filed in 2019 after authorities discovered 1,010 properties in Paris, one of Airbnb’s largest markets, that did not have registration numbers required by a 2017 law.

The registration numbers ensure properties are not rented out for over 120 nights a year and that rental income is reported to tax authorities.

Airbnb has argued that as a service provider, it should not be responsible for ensuring that users of its site comply with local laws.

However, the Paris court imposed a fine of €8,000 per entry “given the seriousness of the violations…. and their impact on the public interest in combating the shortage of rental housing,” in the capital.

However, the fine was less than the €12.5 million demanded by the city.

“This decision, the first in France, is a significant victory in our fight to regulate all housing and rental markets,” the city’s mayor, Anne Hidalgo, said on Twitter.

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Le tribunal judiciaire de Paris a condamné Airbnb à verser une amende de 8 millions d’euros à la Ville de Paris. Cette décision, une première en France, est une grande victoire dans notre combat pour le logement pour tous et la régulation du marché locatif. https://t.co/kbKBpMGHLU

— Anne Hidalgo (@Anne_Hidalgo) July 1, 2021

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Responsible tourism

Airbnb announced Thursday that it will now require Parisian landlords to prove that their property is registered with City Hall.

So far, Airbnb has not blocked landlords who have not registered their rooms.

The platform will introduce similar rules in Bordeaux on July 30 and expand to other popular French destinations such as Lyon, Nice, and Marseille by the end of the year.

“This new move is part of Airbnb’s many commitments to promote responsible tourism,” the company said in a statement.

It said the “vast majority” of property owners in Paris already comply with the registration requirement, but did not give figures.

Before the COVID-19 pandemic, Airbnb had 65,000 listings in the city.

“It’s a victory,” the city’s deputy mayor for housing, Ian Brossat, said Thursday in an interview with the Parisien newspaper.

He said more than half of the 30,000 listings in Paris currently have no registration number.

Airbnb reports Paris accounted for only 10% of all searches in France in May, while searches for rural accommodation accounted for 45% this summer, compared to 24% in summer 2019.