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Following legal issues across the US, Airbnb is facing serious conflicts with the local government in Amsterdam, The Netherlands.

…things appear to be escalating quickly: reports are surfacing that next week a team of civil servants will go out on the streets to look for illegal hotel activities.

This isn’t an isolated issue [half of Airbnb’s listings in New York City are illegal], and it signals major problems for Airbnb in the long run. A full ban in Amsterdam could cause a chain reaction, but that may not even be necessary to cause major issues for the service; a wide-scale scare such as this could turn the city against the service as residents face massive fines.

Photo Credit: Residents and tourists linger around the canal on a spring day in Amsterdam. Claudio Alejandro Mufarrege / Flickr