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THE US-based short-term rental site Airbnb has been forced to cough up a massive €64 million fine after a Spanish court threw out a request to delay its payment.
The High Court of Justice of Madrid’s ruling published on Monday denied Airbnb’s request to suspend the payment of the fine pending a final judgment in the case, which means the company has no other choice than to pay.
Airbnb stated in a press release that “this decision is only procedural and doesn’t address the substance” of the case.
Airbnb has always complied with the applicable regulations in Spain. Airbnb has filed an appeal because it believes that this sanction is contrary to Spanish and European law frameworks.
The company has now filed a fresh appeal with the same court.
The legal proceedings come after Airbnb was slapped with a €64 million fine by the Spanish government last December over more than 65,000 adverts encouraging customers to rent out unlicensed tourist apartments.
READ MORE: Spain launches massive Airbnb purge: Platform ordered to remove 86,000 illegal listings – Malaga leads the way
The Ministry of Consumer Affairs announced that it has identified 65,122 ads on Airbnb’s site promoting tourist apartments which violate consumer protection laws.
Investigators found advertisements that listed accommodations without the necessary licenses required by Spanish law.
Some posts were misleading and told potential buyers that the property had a licence when it didn’t.
In total, Airbnb will be forced to cough up a penalty of €64,055,311 – six times the profit raked in from the illegal listings by the company, which pocketed a net income of almost €2.2 billion last year.
Pablo Bustinduy (left-wing consumer affairs Minister) said, “There are thousands families on the verge of bankruptcy because of housing. While a few get rich off business models that drive people from their homes.”
He added that “no company in Spain can be above law, no matter how big or powerful it is.”
Pedro Sanchez’s government enacted a law in July 2013 that ordered the removal of unregistered vacation rentals from websites such as Airbnb or Booking.com.
According to a report by the National Statistics Institute (INE) published in November, Spain is home to 329,764 tourist rental flats – a 12.5% decrease on a year beforehand.
READ MORE: Spain’s Airbnb Crisis Exposed: One third of homes in tourist hotspots are now short-let
Residents in Spain often blame the rise in rental prices on the growth in tourist accommodation.
The anger has led to mass protests erupting in cities including Alicante, Malaga, Palma de Mallorca and Barcelona, with demonstrators marching under banners such as ‘Our city is not for sale’ and ‘Tourists go home’.
Madrid, Malaga, and the Canary Islands authorities have pledged to tighten rules on permits to combat overtourism.
Mayor Jaume Colboni of Barcelona announced that by 2028, all tourist apartment licences in the city would be cancelled.
He said the rising cost of property in the city – rental and purchase prices have surged by 70% and 40% respectively in the past decade – had forced him to take drastic action.
Collboni administration enforces rules that anyone renting a hotel room for less than 30 days is running a tourism business. They must obtain an authorisation by the city council.
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