UPDATE: See below for statement from Airbnb. Also read our follow-up article.

Following legal issues across the US, Airbnb is facing serious conflicts with the local government in Amsterdam, The Netherlands.

Airbnb’s issues in Amsterdam have been ongoing; in fact, an investigation into the service was ordered by authorities back in November, led by Alderman Freek Ossel. So far, 200 “suspicious” homes have already been researched, and Dutch newspaper Parool reports that “if something was wrong while tourists were staying in the homes, [authorities] closed the houses and tourists were stranded on the streets of Amsterdam” [translation:TNW].

Now, things appear to be escalating quickly: reports are surfacing that next week a team of civil servants will go out on the streets to look for illegal hotel activities. Government representative Eikelboom has reportedly stated that “it’s not unlikely that teams will check whole streets simultaneously.”

These government workers will apparently be looking into “fire safety,” but also illegal rental of rooms to tourists. Parool goes on to state that “there are approximately 2,000 properties in Amsterdam that run illegal ‘hotel like’ businesses.” Clearly, this means trouble for users of both Airbnb and Rocket Internet clone Wimdu. Airbnb currently counts 4191 listings for Amsterdam, making it one of its most popular cities in Europe.

Aside from safety concerns, the local government is fighting back because most hosts don’t pay taxes on their income from ‘illegally renting.’ The government believes Airbnb doesn’t comply with local legislation (VAT and tourist tax). Conversely, Airbnb calls itself a marketplace, and states that its users are responsible for complying with the local legislation.

That appears to have been the same argument eBay and Paypal made in the past, however both were eventually forced to comply with local legislation.

Is Airbnb illegal?

The Amsterdam government released an official statement in regards to this issue, and went on to define an illegal hotel as “an apartment or house without an official hotel permit that can be rented by tourists in return for money”  [translation:TNW]. Legal exceptions appear to be renters with a short stay permit or official bed and breakfast businesses. By that definition, hosting a room on Airbnb is already illegal.

Our sources tell us that the local Amsterdam government has been in contact with Airbnb EU in regards to this matter.

This isn’t an isolated issue, and it signals major problems for Airbnb in the long run. A full ban in Amsterdam could cause a chain reaction, but that may not even be necessary to cause major issues for the service; a wide-scale scare such as this could turn the city against the service as residents face massive fines.

UPDATE: Airbnb has issued the following statement, which we’ve reproduced in full below:

“Last weekend, journalists speculated that city officials in Amsterdam were on the verge of banning Airbnb.

“The City of Amsterdam was quick to post a clarification on its official Facebook page, noting that the journalist had not checked with any government sources before publishing the article.

“According to city spokesperson Jan-Jaap Eikelboom, the conclusion that a ban was in the works was unfounded. “We obviously don’t want to ban Airbnb, which is a good initiative.” From his personal Twitter account, Eikelboom noted, “Nobody takes time to double-check sources.”

“As I’ve written before in this space, Airbnb is committed to working collaboratively with governments at all levels to ensure that our members bring a range of benefits to the communities they inhabit. Even when sensationalism threatens to overpower the discourse, we stand by our strategy: thoughtful, rational progress that focuses on harnessing the benefits of innovation while maintaining a responsible, positive community.”

Now read our follow-up article.
Image credit: Thinkstock / David De Lossy