Copyright 2011, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, May 2011

On May 27, 2011, the Competition Bureau announced that it had filed an application with the Competition Tribunal in response to certain practices by the Toronto Real Estate Board (TREB) that the Bureau alleges are anticompetitive. In particular, the Bureau has alleged that TREB has restricted the ability of real estate agents to introduce innovative real estate brokerage services through the Internet, thereby harming consumers.

The application was brought under the Competition Act's abuse of dominance provisions, which provide for non-criminal sanctions where a dominant firm has engaged in a practice of anticompetitive acts that are likely to prevent or lessen competition substantially. The Bureau alleges that TREB, which is the largest real estate board in Canada and owns and operates the Toronto Multiple Listing Service system (the Toronto MLS system), currently restricts and prevents brokers from sharing detailed MLS system data with customers in new ways, such as through secure, password-protected "virtual office websites" (VOWs). The Toronto MLS system has information about specific properties that is not available on other websites, such as www.realtor.ca, including data about previous listing and sale prices, historical prices for comparable properties, and the amount of time a property has been on the market, all of which may inform consumers' home purchase and sale decisions.

According to the Bureau, VOWs would permit customers to conduct their own searches for, and review information relevant to, the purchase and sale of homes in the GTA, without the personal assistance or direct intervention of a broker. Currently, brokers and their staff are limited to obtaining such information from the Toronto MLS system themselves and providing it to their customers by hand, email or fax.

The Bureau's application notes that real estate boards and associations in other Canadian jurisdictions, such as Nova Scotia, allow their members access to and use of their MLS information to provide Internet-based services and, in the United States, such access to and use of MLS information is commonplace. According to the application, brokers that use such innovations enjoy cost savings that enable them to compete more effectively against traditional brokers, in addition to providing consumers greater convenience and choice of services.

The Bureau's application seeks an order from the Tribunal that would, among other things:

  • prohibit TREB from directly or indirectly enacting, interpreting or enforcing any rules that exclude, prevent or discriminate against TREB member brokers who wish to use the information in the Toronto MLS system to offer services over the Internet, such as through VOWs;
  • direct TREB to implement such resources and facilities as the Tribunal deems necessary to ensure the operation of VOWs or similar services by, or on behalf of, member brokers; and
  • grant such further and other relief as the Tribunal may consider appropriate.

Filing an application against TREB in this matter is consistent with the priority the Bureau has placed on pursuing abuse of dominance cases. Although this application is separate and apart from the consent agreement that was entered into last fall by the Canadian Real Estate Association (CREA) and the Commissioner of Competition, which resolved the Commissioner's concerns that the MLS rules imposed by CREA constituted an abuse of CREA's dominant position in the provision of residential real estate services, it demonstrates the Bureau's continued interest in abuse of dominance cases, particularly in connection with real estate brokerage services. For additional details regarding the Commissioner's proceedings against CREA, please see our October 2010 Blakes Bulletins: Competition Bureau Update on MEGs Consultation, Leniency Bulletin and CREA Settlement and Competition Bureau Releases Updated Service Standards for Mergers; Announces Definitive Agreement with CREA.

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