Airbnb chose to fight.
In June, San Francisco essentially backed Airbnb into a corner, asking the startup to comply with tougher rental legislation or face daily fines. At the time, the company refused to say how it would proceed or whether it would comply.
Twenty days later, we now know what Airbnb's path forward will be.
On Monday, the startup announced in a blog post that it has decided to sue its hometown over the latest regulations, arguing that the city broke federal law and went against its First Amendment rights of freedom of speech.
"This is an unprecedented step for Airbnb, and one we do not take lightly, but we believe it's the best way to protect our community of hosts and guests," the company wrote in its post.
The feud began in early June after San Francisco's Board of Supervisors voted 10-0 to pass tougher legislation that would make short-term rental companies responsible for enforcing some of the city's rental laws. The ordinance was officially passed on June 14, and the mayor enacted it on June 24.
As it stands, Airbnb hosts in San Francisco are required to be registered with the city. The new legislation requires that Airbnb list on its website only properties that are in compliance and have a registration number. Supervisor David Campos, who put forth the legislation, likened it to a rental-car company requiring a driver's license to operate.
If Airbnb failed to do so, then the city would fine the startup and other home-sharing companies like it up to $1,000 daily for every day that they maintain listings on their sites that aren't registered properly.
Airbnb has decided to sue, arguing that the rules do nothing to fix the onerous registration process and puts San Francisco residents at risk for eviction.
In a copy of the complaint, viewed by Business Insider, the startup alleges that the city violates several federal laws and the First Amendment by restricting its free speech. Specifically, Airbnb argues that it goes against the Communication Decency Act of 1996 and the Stored Communications Act.
The lawsuit doesn't come without warning, though. Before the vote, law firm Davis Wright Tremaine sent a letter commissioned by technology coalition CALinnovates to the San Francisco city attorney, arguing that the amendment would threaten "vital protections" of online content and "would be vulnerable to a legal challenge."