Europe's top court on Tuesday upheld France's law requiring municipal authorisation for short-term property rentals by platforms like Airbnb, a decision that may open the way for several European cities to take action.

"Combatting the long-term rental housing shortage constitutes an overriding reason relating to the public interest justifying such legislation," the European Court of Justice said, throwing out a challenge.

An alliance of 22 European cities has been pushing for tougher rules to Airbnb and other short-term rental platforms, accusing them of driving up property prices by turning residences into de facto hotels.

Paris fined two landlords who rented out studio apartments without authorisation from the city, leading them to appeal against the decision all the way to the top EU court, which found against them on Tuesday and ruled that France's rule "is consistent with EU law."

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.