The city of Paris is suing Airbnb for €12.5m (£11m) over 1,000 adverts for what it says are illegal rentals, BBC reported.
Homeowners in the city can rent out their properties for only 120 days per year. They must register themselves as a business and display their registration number on any advertising.
Under French law, companies can be fined up to €12,500 for each advert.
Airbnb said the rules in Paris were “inefficient, disproportionate and in contravention of European rules”.
According to a 2018 report by analyst Statista, Paris was Airbnb’s second most popular destination in terms of active rentals, with London in the top spot.
On its website Airbnb says that after a property has been booked out for 120 nights in one of the 18 French cities where the rule applies, the calendar will be blocked out so that no more bookings can be made.
It also says that every other holiday rental service that is a member of the French holidays homes body, the UNPLV (Union Nationale pour la Promotion de la Location de Vacances), is imposing this automated limit.
Speaking to French newspaper Journal du Dimanche, Anne Hidalgo, the Mayor of Paris, said unauthorised rentals “spoil some Parisian neighbourhoods”.
Critics of platforms such as Airbnb say they can drive up private rental prices in an area and result in an increase in anti-social behaviour by guests.
Speaking to BBC News in 2018, Airbnb said it was important that residents and communities could “benefit from often record numbers of visitors to their cities”.