Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada’s case against Toronto Real Estate Board will return to Competition Tribunal, (Feb 4, 2014)

By Jeffrey May, J.D.

Canada’s Federal Court of Appeal has overturned a Competition Tribunal decision concluding that the Toronto Real Estate Board (TREB), as an incorporated trade association, could not have contravened the “abuse of dominance” provision in Section 79 of the Competition Act because it does not compete with its own members in the real estate brokerage market. The appellate court accepted the Competition Commissioner’s position that an entity that is not a competitor in a particular market might still control the market substantially under the Act by, for example, controlling a significant input to competitors in the market, or by making rules that effectively control the business conduct of those competitors (Commissioner of Competition v. Toronto Real Estate Board, February 3, 2014, Sharlow, K.).

The Canada Competition Bureau announced yesterday that the case will return to the Competition Tribunal where the Competition Bureau had challenged as anticompetitive TREB rules that restricted how its members could present information to customers. The Competition Tribunal will now reconsider the Commissioner of Competition’s application on its merits.

The Competition Bureau charged in May 2011 that TREB’s rules restricting how its member agents provide information, like previous listings and previous sale prices, to customers harmed competition by denying agents the ability to introduce innovative real estate brokerage services using the Internet, such as through Virtual Office Websites (VOWs). VOWs are password-protected websites that permit customers to search a full inventory of listings containing up-to-date data online, before making the decision to tour a home or attend an open house. This enables customers to be more selective and focused, and agents to spend less time trying to find an appropriate property for a specific customer.

In April 2013, the Competition Tribunal rejected the challenge. The Competition Bureau then filed the appeal, seeking to overturn the Competition Tribunal’s ruling, on the ground that it misinterpreted the abuse of dominance provisions of the Competition Act.

The TREB is the largest real estate board in Canada. It owns and operates the Toronto Multiple Listing Service system, which contains current property listings and historical information about residential real estate purchases and sales in Toronto and the surrounding area.

“I am pleased with the Federal Court of Appeal’s decision to refer our application back to the Competition Tribunal,” said Canada Commissioner of Competition John Pecman in response to the decision. “The Competition Bureau will continue to fight to promote innovation in the marketplace to the benefit of Canadian consumers.”

The case is 2014 FCA 29.

News: Antitrust