Earlier this month, the Competition Tribunal issued its order for a remedy following its decision in
late April finding that the Toronto Real Estate Board (TREB) had
abused its dominant position in imposing restrictions on the use of
data on its Multiple Listing Service (MLS) contrary to Section 79
of the Competition Act.
Initially, the Tribunal actually dismissed the
Commissioner's application in 2013. The Commissioner
successfully appealed and the case was sent back to to the Tribunal
for a rehearing in 2015.
In late April, the Tribunal issued its long-awaited ruling, which reversed its prior decision and
held that TREB had abused its dominant position. The Tribunal gave
TREB 60 days to lift the restrictions prohibiting agents from using
home sales data on their virtual office websites (VOWs); websites
that could be accessed by consumers on their computers, tablets and
smartphones. TREB was also ordered to pay costs to the Commissioner
of over $1.8 million.
TREB's Abuse of Dominance
The Tribunal found that restrictions imposed by TREB's on
the use of MLS data (in particular sales prices) on agents'
VOWs substantially prevented competition by inhibiting innovation
in the residential real estate services market.
Importantly, the Tribunal held that, despite the fact that TREB
was an association that did not itself compete in the market for
residential real estate services, it could be subject to an order
under the abuse provisions. In this case, TREB was found to have
controlled access to, and use of, MLS data and imposed conditions
to the use of MLS data that impacted how its member real estate
agents could compete with one another. The Tribunal also held that
TREB had an interest in exercising its control over the MLS in a
manner that benefitted members who were offering traditional
services and was to the detriment of members who were seeking to
pursue innovative service models.
Some of the key takeaways from the TREB case include:
The Tribunal's confirmation of
the "hypothetical monopolist" approach as appropriate
framework for market definition in abuse of dominance cases;
That associations can abuse their
dominant positions where they partake in conduct (for example,
standard-setting, the imposition of rules of conduct, etc.) that
insulates its members from competition or favour some members at
the expense of others – which may result in higher prices,
reduced service levels and decreased innovation; and
The Commissioner's focus on the
digital economy, including taking enforcement action to ensure that
Canadians benefit from innovation and new technologies. Other
examples include recent enforcement action in the misleading
advertising space and the recently-announced market study regarding
technology-led innovation in the financial services sector (click
here for our e-LERT regarding the study).
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The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
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