As far as the state of New York is concerned, most of Airbnb's business is illegal.

What had been a relatively civil legal proceeding spilled into the press this week when the rental

startup and New York Attorney General Eric Schneiderman met in court on Tuesday. Airbnb has said the attorney general “is determined to fight innovation and attack regular people.” The attorney general's office claims it has worked with numerous other tech companies to stamp out illegal activity, but that Airbnb is being evasive.

At the center of the dispute are records of Airbnb’s hosts who rented their homes in New York. The

attorney general wants the information. Airbnb, worried about the impact this could have on its customers and its business, has resisted.

That may seem like a local issue, but the ramifications are big. The case could become a guide for

other municipalities that want to limit rentals through Airbnb.

Beyond Airbnb, the case is among the most high profile of any company in the sharing economy, the

peer-to-peer marketplaces that some believe could change how we do business everywhere.

Let's start simple.

Read the full article at mashable.com