Don't Miss

Korean court rules unregistered Airbnb illegal

September 23, 2015

SEOUL (Yonhap) — A court has ruled against providing unregistered places to stay through Airbnb, the world’s largest home-sharing website, court records showed Wednesday.

The Busan District Court fined a 55-year-old housewife, whose identity was withheld, 700,000 won (US$590) on Aug. 26 for seeking to profit by renting out her house to people who booked through Airbnb without reporting to the local authorities.

The South Korean public health control act requires anyone who runs an accommodation business to report it to the district office.

The Seoul Central District Court also ruled against a 34-year-old who was indicted on a similar charge.

The rulings were the first of their kind amid Airbnb gaining more leverage in the industry with around 200,000 yearly users since it made inroads into the country in January 2013.

Launched in 2008, Airbnb, which provides over 150 million accommodations in 34,000 cities in 190 countries, has a company value of some $25.5 billion, comparable to that of Hyundai Motor Co., South Korea’s top carmaker.

Yet, accommodation businesses have criticized Airbnb as most places offered through the company are not registered, avoiding regulations and taxes.

South Korea does not have data on the proportion of unreported accommodations among some 11,000 places listed on the site.

Last October, prosecutors of New York said that 72 percent of the Airbnb accommodations in New York City were illegal.

“We run a separate page on our website encouraging hosts to examine the local regulations before listing their houses,” an Airbnb official said.

“It’s a conflict between the existing system and the new one in the process of a new paradigm of a sharing economy being introduced to our society,” said Cho Yong-soo, a researcher at LG Economic Research Institute.