Real Estate Wars: Canada’s Competition Tribunal Rejects Attack on Toronto Real Estate Board’s MLS

April 16th, 2013

In a much-anticipated decision, the Competition Tribunal rejected the Competition Commissioner’s application to force The Toronto Real Estate Board (TREB) to relax its rules surrounding how Multiple Listing Service (MLS) information was used by real estate agents. The Tribunal also ordered the Commissioner to pay TREB’s costs.

At issue in the six-week long trial held in the fall of 2012 was whether TREB’s restrictions of how much information posted by real estate agents on MLS would be visible to the public at large over the Internet was an abuse of TREB’s dominant position and thus, anti-competitive. The Commissioner objected to what were alleged to have been overly restrictive rules that prevented consumers from obtaining and using historical sales information and other information available only to real estate brokerages. If the rules were relaxed, the Commissioner claimed, innovative solutions and more à la carte real estate services would be available to consumers and at a lower cost.

In The Commissioner of Competition v. The Toronto Real Estate Board, a three-member panel of the Tribunal rejected the Commissioner’s Application under the Abuse of Dominant Position provisions of the Competition Act citing the fact that since TREB and the Commissioner both agreed that TREB, who controls MLS, does not compete with real estate agents, TREB’s restrictions cannot have the negative effect on a competitor as required by the rule enunciated by the Tribunal in a case known as Canada Pipe. In that case, the Tribunal held that the dominant firm must compete with the firms harmed by the dominant firm’s practice of anti-competitive acts in order to satisfy the test under subsection 79(1) of the Competition Act.

Also harmful to the Commissioner’s case was the fact that the Commissioner’s own “Abuse of Dominance Guidelines” specifically state that the dominant party must intend to negatively impact a competitor. TREB not being a competitor of its member real estate agents, the Tribunal’s logic went, meant that it could not have had the negative impact alleged by the Commissioner. This was consistent, the Tribunal held, with the Abuse of Dominance Guidelines, which do not clearly state that the dominant party need not compete in the market.

TREB was represented at the Tribunal by Affleck Greene McMurtry lawyers Donald S. Affleck, Q.C., David Vaillancourt, and Fiona Campbell.