Airbnb Faces Class Action Lawsuit Over Alleged Unlicensed Services and Improper Fees

KEY HIGHLIGHTS:

• Airbnb faces class action lawsuit over alleged unlicensed real estate brokerage and travel agent services
• The lawsuit argues that Airbnb is also not registered as a money services business, therefore collection of fees and commissions is improper
• Airbnb says the lawsuit is an ‘abuse of process’

US-based rental giant Airbnb Inc. is facing a class action lawsuit filed by a Canadian consumer who claimed that the company was offering unlicensed real estate brokerage and travel agent services while improperly collecting fees.

Plaintiff Margo Ware filed the lawsuit in May 2022 accusing Airbnb of operating without the necessary licenses to provide real estate or travel agent services in Canada.

Additionally, the lawsuit alleged the company was not registered as a money services business with the federal government, and that the actions have led to the improper collection of fees and commissions from users who booked accommodations through the platform.

The legal action targeted anyone who made a reservation via Airbnb, both within Canada and abroad—excluding the United States—for accommodations in British Columbia.

On Thursday, Justice Elizabeth McDonald ruled that Ware’s case presented a “good arguable case” that, if proven, could result in damages under British Columbia’s Business Practices and Consumer Protection Act.

‘Abuse of process’

Airbnb argued that the lawsuit was an “abuse of process” and part of an ongoing effort to challenge the legality of its fee collection practices.

It also sought to have the case heard in California, where it is headquartered, but was rejected by Justice McDonald, saying that Airbnb had failed to provide sufficient evidence to move the case out of British Columbia.

The company further argued that the lawsuit should not proceed due to overlapping issues with other legal challenges it faced related to similar claims of improper fee collection.

However, Justice McDonald dismissed these objections, stating that the only overlap was Airbnb’s consistent facing of lawsuits over its fee practices.

If successful, the class action could result in compensation for affected consumers under provincial consumer protection laws.

Justice McDonald emphasized that certifying the lawsuit for further consideration does not imply a judgment on its merits, but merely allows the legal process to move forward.

Airbnb has yet to respond publicly to the ruling.

What do you think about Airbnb’s imposition of fees collection?