A U.S. judge on Tuesday rejected Airbnb’s request to block a San Francisco law that forbids the home-rental company from taking bookings from hosts who have not registered their home with the city.
The Tuesday ruling from U.S. District Judge James Donato thoroughly rejected Airbnb’s contention that the ordinance violated a broad federal law that protects internet companies from liability for content posted on their platforms.
The San Francisco ordinance “does not regulate what can or cannot be said or posted in the listings. It creates no obligation on plaintiffs’ part to monitor, edit, withdraw or block the content supplied by hosts,” Donato wrote.
Get Data Sheet, Fortune’s technology newsletter.
The decision is a blow to an argument Airbnb has come to rely on to fight regulatory crackdowns in cities across the U.S.
While Donato denied Airbnb’s request for a preliminary injunction blocking the law and indicated he saw little merit in the company’s legal arguments, he did call for further proceedings on how exactly the new ordnance would be enforced.
Airbnb, which provides a website to connect hosts with short-term renters and related services, had invoked Section 230 of the U.S. Communications Decency Act, a 20-year-old statute designed to protect free speech online, to sue San Francisco and two other California cities.
Airbnb Is Still Trying to Resolve its Legal Issues in New York and San Fransisco
Without the protection of Section 230, Airbnb could be much more vulnerable to local efforts to introduce tougher laws aimed at limiting Airbnb’s impact on housing stock and rent prices.
The San Francisco ordinance, enacted in August, makes it illegal for Airbnb to collect fees for providing booking services for rentals listed on its website that had not properly registered with the city. Airbnb makes money by charging a service fee on bookings.