Rental and sharing giants HomeAway and Airbnb have each been slapped with a $635,000 fine over alleged permit issues in the city of Barcelona.
Administrators in the Spanish city say the pair have flouted regulations for advertising tourist accommodation that have not been authorised to host tourists on their properties.
This is a repeated offence dating back to December last year, Barcelona city hall says.
Regional laws in the Catalonia enclave state that any apartment or property that is being used to share or rent to tourists must have a permit organised by the Tourism Registry.
Expedia Inc-owned HomeAway says it "regrets the disproportionate reaction" of city officials in Barcelona and argues that the fine is contrary to European legislation created to invigorate "normal development of the ecommerce and the holiday rentals platforms".
An official adds:
"Far from what the City Hall seems to suggest, platforms like HomeAway represent the future of tourism industry and provides transparency and guarantee to consumers as never enjoyed before."
Allowing homeowners to rent out their properties has "undeniable benefits" to the region, supports local businesses and helps spread the placement of travellers into different areas - a move, HomeAway claims, is "relieving the pressure on certain touristic zones".
The company says it, alongside reserving the right to appeal the fine, is working with homeowners on the issue.
"HomeAway runs regular information and awareness campaigns on regulation among homeowners, has enabled a specific field to display the registration number and openly collaborates with authorities to look for solutions that allow the free exercise of the activity and the fairest distribution of its positive impact."
Airbnb says it is "saddened" by the decision to impose a fine on the company and that it will appeal the ruling.
An official adds:
"Airbnb is part of the solution in Barcelona. We want to be good partners to cities and we will keep proactively seeking collaboration with Barcelona to maintain this dialogue and support regular people who share their homes."
Sharing and rental companies are concerned that the existing legislation in the city of Barcelona is confusing for owners, with multiple layers of local government apparently issuing mixed messages about new concepts for the accommodation of tourists.
A darker angle to their frustration is that Barcelona is considered by some to be biased towards the hotel industry, with the renting/sharing model seen as a threat to the status quo and not in the interest of boosting the wider economy and supporting residents who want to earn additional income.