TORONTO — The Competition Tribunal has found the Toronto Real Estate Board engaged in anti-competitive acts, a move that could signal an end to attempts by Canada’s largest board to restrict access to its listings.
The ruling released Thursday by the quasi-judicial tribunal accused the country’s largest real estate board, with more than 40,000 members, of continuing to be anticompetitive, zeroing in on TREB’s practice of banning what are called virtual office websites (VOWs), created by smaller private brokers to provide clients with access to the Multiple Listing Service.
“This is a good day for competition and innovation,” John Pecman, commissioner of the federal Competition Bureau, said in a release.
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The Tribunal said TREB’s anti-competitive acts centred around the board’s governance of members.
“In essence, that (anti-competitive) practice is comprised of the enactment and maintenance of certain restrictive aspects of the rules and policy that TREB has adopted with respect to VOWs,” according to a summary of the ruling. “VOW restrictions have had, are having and are likely to have the effect of preventing competition substantially in a market.”
The case was launched in May, 2011, by the Competition Bureau, which filed an application with the Tribunal seeking to prohibit the practice of denying agents the ability introduce real estate brokerage services using the Internet. The tribunal originally dismissed the application in 2012 from the commissioner but agreed to another hearing in the fall of 2015.
“This is a devastating decision for those who think they can manipulate the MLS,” said Lawrence Dale, a lawyer and one-time realtor who has been in a legal battle with TREB over the creation of VOWs and has an ongoing civil suit. “There is now one final chapter to be written and I hope TREB can count that high.”
In its summary, the tribunal says that on a balance of probabilities three elements of section 79 of the Competition Act have been proven.
“The Tribunal first concluded that TREB substantially or completely controls the supply of MLS-based residential real estate brokerage services in the GTA,” it said. “VOW restrictions have substantially reduced the degree of non-price competition in the supply of MLS-based residential real estate brokerage services in the GTA, relative to the degree that would likely exist in the absence of those restrictions. Most importantly, this includes a considerable adverse impact on innovation, quality and the range of residential real estate brokerage services that likely would be offered in the GTA, in the absence of the VOW Restrictions.”
The ruling said the tribunal has partially granted the application brought by the Commissioner of Competition which was an order prohibiting TREB engaging in certain anti-competitive acts which includes restricting access to certain MLS information on the password-protected virtual office websites.
The exact terms of the order have yet to be decided and TREB still has the opportunity to appeal the case to the Federal Court of Appeal.
TREB said it had been advised by its legal counsel that of a lengthy confidential document containing the Competition Tribunal’s decision.
“At this time we understand that no order has been issued and that the Tribunal has only partially granted the Bureau’s Application. The Tribunal has also asked that both parties provide input to remedies,” John DiMichele, chief executive of the Toronto Real Estate Board, in a statement.