Back in October, the state of New York passed a new law specifically aimed at micro-hoteliers who rent out one or more New York City apartments to tourists. Airbnb immediately sued the state and the city over how the law will be enforced, and now the case has been settled.

While the law was a state one, it applies only to a specific kind of short-term rental in the five boroughs of New York City. It was already illegal to sublet an entire unoccupied apartment for less than 30 days; the law increased the penalties, with fines up to $7,500.

New York (the state) was dismissed from the suit, promising to leave enforcement to the New York (the city.) Reuters reports that Airbnb, which insists that it’s a platform to list lodging and not a hospitality company, was concerned that it could be held responsible for its users’ listings. That would mean that the service would either need to perform inspections and regular audits, or leave the New York City market entirely.

In a settlement announced today, the city and the home-listing service agreed that those new and very high penalties would apply only to the individual hosts, and not to Airbnb itself.

In a statement, Airbnb said that the company “look[s] forward to using this as a basis to finding an approach that protects responsible New Yorkers while cracking down on illegal hotels that remove permanent housing off the market or create unsafe spaces.”

The company maintains that making hosts comply with local laws is not its responsibility, though it has been selectively applying some local laws and ordinances.

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