Reuters International

MADRID (Reuters) - A Spanish court on Wednesday overruled Madrid legislation that banned renting tourist accommodation for fewer than five days in a victory for the "sharing economy" which allows people to stay in ordinary people's homes through sites like Airbnb.

The measure, brought in two years ago, allowed the hotel sector to dominate short-term lets for visitors to the capital at a time of record Spanish tourist numbers, although it was not strictly enforced.

Airbnb's critics say short-term rentals drive up property rents. Last week, the European Union executive gave its support to companies like Airbnb and ride-hailing app Uber [UBER.UL], saying governments should only ban such services as a last resort.

The ruling was in response to an appeal by a local home-sharing association Madrid Aloja ('Madrid Accommodates').

However, a Berlin court upheld a city ban on short-term home rentals in the German capital earlier on Wednesday, illustrating the patchwork response to the fast-growing sector adopted by European cities.

Although not legally binding, the guidelines are an attempt to set a Europe-wide approach to the sector which challenges traditional industries such as taxi services and hotels.

Apart from the criticism of Airbnb, taxi drivers have staged high-profile protests against Uber in many European countries.

(Reporting By Tomas Cobos, Editing by Sonya Dowsett; Editing by Richard Balmforth)

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 Reuters International