The United States Court of Appeals for the ninth circuit denied striking down a Santa Monica regulation that holds short-term online companies liable for illicit rentals. The regulation provides tort responsibility for platforms intermediating the rental of residences that are not licenced by the city council. Airbnb Inc. and HomeWay filed the lawsuit alleging that the legal liability violates the U.S. Communications Decency Act of 1996, which shields online services from liability for the content that their users publish on their sites. The Ninth Circuit panel ruled that 'internet companies must also comply with any number of local regulations concerning, for example, employment, tax or zoning'. In addition, the panel concluded that the local regulation restricting short-rental do not constitute a burden to the constitutional right to free speech, because users will still have access to lawful advertisements.