The Supreme Court of Canada recently denied leave to appeal the
Federal Court of Appeal's ("FCA") decision in
Commissioner of Competition v. Toronto Real Estate Board. The
FCA's decision marks a significant clarification of the
Competition Act's abuse of dominance provisions.
The decision confirms that a person can control a market in
which it does not itself compete. This interpretation of the abuse
of dominance provisions means that trade associations, as well as
large customers or suppliers with significant market power, must
ensure their practices do not exclude competitors or otherwise
The Commissioner's Allegations
The Commissioner of Competition ("Commissioner")
applied pursuant to section 79 of the Competition Act—the
abuse of dominant position provision—for orders prohibiting
the Toronto Real Estate Board (the "Board") from engaging
in what the Commissioner alleged were anti-competitive acts.
The Board, a trade association with realtor members concentrated
in the Greater Toronto Area, had adopted a rule prohibiting members
from posting historic residential property listing data from the
Board's Multiple Listing Service online. The Commissioner
alleged that the restrictions on Board members' permitted use
of Multiple Listing Service listings and related data on the
internet prevented or lessened competition substantially in the
market for the supply of residential real estate brokerage services
to vendors and purchasers in the Greater Toronto Area. The
Commissioner also alleged these restrictions primarily harm Board
members who conduct their business online.
Importantly, the Board does not compete with its realtor
members. The Commissioner's case asserted that the Board was
abusing its position as a dominant trade association to harm
competition by its members.
The Competition Tribunal
The Tribunal interpreted the leading case on abuse of dominance,
Commissioner of Competition v. Canada Pipe Co., to stand for the
rule that, for an act to be an "anti-competitive act" for
the purposes of section 79, the dominant firm must compete with the
firm harmed by the dominant firm's practice of anti-competitive
acts. Since the Board does not compete with its members, the
Tribunal found that the abuse of dominant position provision could
not apply to the Board.
The Federal Court of Appeal
On appeal, the FCA overturned the Tribunal's decision and
sent the case back to the Tribunal to be decided on its merits. The
FCA's key finding was that the Tribunal erred in its
interpretation of Canada Pipe: a person does not need to be a
"competitor" to engage in anti-competitive acts within
the meaning of section 79.
The FCA's decision in Commissioner of Competition v. Toronto
Real Estate Board has clarified that the Commissioner may seek an
order under section 79 against a firm that is not a competitor in
the relevant market. In particular, trade associations and large
customers and suppliers may be targets of complaints for abuse of
dominant position, even where they do not compete in a relevant
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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