(Reuters) -Los Angeles sued Airbnb, accusing the home rental company of allowing price gouging affecting more than 2,000 properties during January’s wildfires in southern California, City Attorney Hydee Feldstein Soto said on Friday.
Airbnb was accused of violating a California law that prohibits prices of essential goods and services from rising more than 10% following a state of emergency.
Governor Gavin Newsom declared a state of emergency in Los Angeles on January 7, triggering the state’s anti-gouging law, and it has been extended several times.
Feldstein Soto said that while Airbnb, with an estimated 80% market share in the city, has taken steps to curtail price gouging, “evidence indicates that illegal gouging on the site continues and may be ongoing.”
She also accused Airbnb of misrepresenting to prospective renters that it has “verified” hosts and property locations on its website, some of which don’t exist.
A copy of the complaint was not immediately available.
In a statement, Airbnb said the company, Chief Executive Brian Chesky, and its affiliated nonprofit Airbnb.org have contributed nearly $30 million to fire recovery efforts, including free emergency housing to nearly 24,000 people.
It also said Airbnb hosts receive error messages if they try to boost prices more than 10% from pre-emergency rates.
The lawsuit accuses San Francisco-based Airbnb of violating California’s unfair competition law.
It seeks an injunction to stop illegal rents during the state of emergency, plus civil fines of up to $2,500 per violation, Feldstein Soto said.
The Southern California wildfires killed at least 30 people and destroyed or damaged more than 16,000 structures.
Much of the damage came from the Palisades Fire in Pacific Palisades and the Eaton Fire in Altadena. The fires charred an area larger than Paris.
(Reporting by Jonathan Stempel in New York; editing by Diane Craft)
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