Airbnb hosts in New York are about run into the business end of the sharing economy. According to a newly agreed upon subpoena, the $10 billion rental site will submit anonymized data on local hosts. But if the Attorney General suspects illegal activity, Airbnb will turn over your name, social media account, exact address, Tax ID number and more.

The rule that most otherwise law-abiding hosts should be worried about prohibits renters from subletting their entire apartment for less than 30 days at a time, if they're not present. The judge quashed an earlier subpoena from Attorney General Eric Schneiderman for being too broad. But within the decision, the judge noted evidence that a "substantial" number of hosts may be violating both tax laws and laws that prohibit illegal hotels.

The case went to court only after settlement talks fell apart. But despite the judge's decision, this agreement is a clear victory for the Attorney General. For the first time, it feels like regulators have pierced the Randian logic that let startups become multi-billion companies by breaking the rules, but front as though authorities are impeding the freedom of its customers.

However, the unusually detailed language of the agreement (embedded below) makes it clear that users will be paying the price, unless Airbnb allocates some of the $776 million in venture capital it has raised into protecting hosts.

Here's a joint statement from Darren Weingard, deputy general counsel for Airbnb and Janet Sabel, first deputy attorney general of affirmative litigation for Schneiderman, sent to Valleywag about the decision:

"Airbnb and the Office of the Attorney General have worked tirelessly over the past six months to come to an agreement that appropriately balances Attorney General Schneiderman's commitment to protecting New York's residents and tourists from illegal hotels with Airbnb's concerns about the privacy of thousands of other hosts. The arrangement we have reached today for compliance with the OAG subpoena strikes this balance."

OAG Airbnb Letter of Agreement

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