In February 2010, the Commissioner of Competition commenced an
application against The Canadian Real Estate Association
(CREA)1 alleging that CREA violated the abuse of
dominance provisions of the Competition Act. CREA is a
trade association comprised of over 100 local real estate boards
and 98,000 real estate brokers and agents. CREA owns the MLS®
trademarks, which it licenses to local real estate boards and
associations across Canada who use those trademarks in the
operation of local MLS® systems.
The Commissioner alleges that CREA has imposed certain rules on the
use of MLS® trademarks which substantially lessen or prevent
competition in the market for the supply of residential real estate
brokerage services to homesellers. In particular, the Commissioner
alleges that CREA's MLS® rules reduce the variety of
brokerage service packages available to homesellers and leave
consumers with only the option of using a so-called full-service
real estate broker if they want to sell their home using the
On March 25, 2010, CREA delivered its response to the application,
opposing the application as being "fundamentally
misconceived". CREA disputed the Commissioner's suggestion
that consumers only have one option if they want to sell their
house using a board's MLS® system, noting that CREA's
member real estate brokers and agents offer a wide range of
business models including "discounted" commission rates,
flat-fee arrangements and various fee-for-service arrangements.
CREA also rejected the Commissioner's suggestion that it has
market power in the market for residential real estate brokerage
services. As a trade association, CREA does not supply residential
real estate brokerage services. Rather, its various broker members
compete with one another for the business of homesellers and buyers
CREA also disputed the Commissioner's allegation that its rules
constitute a practice of anti-competitive acts, stating that under
the rules, there has been vibrant competition amongst real estate
brokers. In any event, the rules highlighted by the Commissioner as
being of particular concern were recently amended by CREA's
members in response to the issues raised by the Competition Bureau
in order to clarify the way the rules operate. CREA also opposed
the application on the basis that CREA's rules have not
resulted in a substantial prevention or lessening of competition
given the competition amongst real estate brokers, including from
discount and fee-for-service real estate brokerage providers.
The Commissioner's application against CREA will be the first
contested abuse of dominance case heard by the Competition Tribunal
since Canada Pipe was decided in 2005.
1 Stikeman Elliott LLP is counsel to CREA.
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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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