New York Governor Andrew M. Cuomo has signed a new bill allowing for possible fines to be charged on Airbnb rentals.

Airbnb has retaliated by filing a federal lawsuit stating that the new law may lead to "irreparable harm" to the company. The lawsuit follows the similar ones filed by the company in San Francisco and Santa Monica.

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According to the latest law, authorities may impose up to $7,500 in fines on people caught listing on rentals such as Airbnb. The bill was sponsored by Democrat Linda B. Rosenthalm, who said that the new law is a bold step which may set up a precedent for the US as well as for the foreign countries. She claimed that Airbnb has adversely impacted the availability of affordable housing.

New York constitutes the largest market for Airbnb in the United States. The company filed its lawsuit in the Federal District Court for the Southern District of the city. Airbnb contends that the law impedes the company's rights to free speech and due process. The company also invoked the Communications Decency Act, which offers websites protection against content published by their users.

The New York legislature has stated that it took the Communications Decency Act into cognizance while drafting the new law. It emphasized that the fines will be imposed on the hosts and not on Airbnb. New York Governor Cuomo has until October 29 to sign the bill. The law has been welcomed by the State Hotel and Motel Trades Council. Peter Ward, president of the Council, said that the law is a monumental step.