The Supreme Court of Canada recently dismissed the application
by the Toronto Real Estate Board (TREB) for leave to appeal the
Federal Court of Appeal's judgment overruling a decision of the
Competition Tribunal that had dismissed the challenge of the
Commissioner of Competition (the Commissioner) to certain
restrictions by TREB on the manner in which its member real estate
agents can disseminate information from TREB's multiple listing
service. The Commissioner's application will therefore proceed
to a hearing on the merits before the Competition Tribunal.
The proceedings date back to May 2011, when the Commissioner
brought an abuse of dominance application under subsection 79(1) of
the Competition Act (Canada) (the
Act) against TREB, an incorporated trade association. TREB is the
largest real estate board in Canada with approximately 39,000
members. TREB is said to control a multiple listing service, which
contains data about sale prices, historical house prices, and the
amount of time a property has been on the market. The Commissioner
alleged that TREB had abused its dominance by denying its members
the ability to introduce new web-based real estate brokerage
services by limiting the use members are allowed to make of the
listings and related data.
The Tribunal held that the abuse of
dominance provisions did not apply because TREB, as an association,
does not compete with its own members (or otherwise) in the market
for real estate brokerage services. As such, the Commissioner could
not demonstrate that the three requisite elements of abuse of
dominance in Canada had been met, i.e., (i) dominance of a market,
(ii)a practice of anti-competitive acts, resulting in (iii) a
substantial prevention or lessening of competition.
Federal Court of Appeal (FCA) Decision
On appeal, the FCA concluded that the Act's
abuse of dominance provisions do not require that a dominant party
be a competitor in the allegedly affected relevant market or that
its conduct be targeted at competitors. Accordingly, the FCA
concluded that the Tribunal had erred in dismissing the abuse of
dominance application brought by the Commissioner against TREB.
Supreme Court of Canada Decision
TREB filed an application to the
Supreme Court of Canada for leave to appeal the decision of the
FCA. In July 2014, the Supreme Court of Canada dismissed TREB's
application for leave to appeal. The application will now proceed
before the Competition Tribunal.
The FCA has taken an expansive view of the scope of abuse of
dominance in Canada, one which potentially gives the Commissioner
greater scope to bring proceedings against trade associations. The
Commissioner's application may provide the Competition Tribunal
with an opportunity to clarify how the law will treat trade
association rules or policies that impact the manner in which
members of trade associations compete.
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