Competition Bureau appeals dismissal of Toronto Real Estate Board case
2-year-old case alleges restricting access to MLS information violates Competition Act
The federal Competition Bureau has filed an appeal in Federal Court seeking to reverse the dismissal of its case against the Toronto Real Estate Board (TREB), which alleged the board was engaging in anti-competitive practices by limiting the kind of information its members can provide to clients.
"We believe that the competition tribunal erred in dismissing our application and in not ruling on the facts of the case," John Pecman, interim competition commissioner, said in a news release Tuesday. "It is our view that TREB's anti-competitive behaviour continues to restrict potential homebuyers and sellers from taking advantage of a greater range of service and pricing options when making one of the most significant financial transactions of their lives."
The tribunal dismissed the bureau's case in April, saying its allegation that TREB was violating the Competition Act by abusing its dominant position to limit competition in the real estate market was not valid because as an incorporated trade association, TREB does not compete with its own members.
On Tuesday, the bureau said not allowing it to use the abuse of dominant position argument could open up a loophole that other trade organizations might use to limit competition.
"We are concerned that, if the tribunal's decision is left to stand, trade associations may be tempted to develop rules aimed at preventing or eliminating potential new forms of competition," Pecman said.
MLS a gold mine of information — but only for agents
TREB represents 31,000 realtors in the Greater Toronto Area and controls access to the Multiple Listings Service (MLS)system.
The MLS system contains all kinds of information that currently can't be accessed by ordinary house seekers, only brokers.
This information includes everything from previous listing and sale prices to historical prices for comparable properties to the amount of time a property has been on the market.
It also sometimes contains demographic information on crime and traffic statistics, and even local hospitals and schools — information agents sometimes provide to clients by fax or email.
The bureau had argued that agents should be allowed to provide some of this detailed market data to their clients in an easily accessible form — such as on a password protected website.
Better-informed homebuyers better for all?
Allowing customers to search a full inventory of up-to-date listings before going to an open house or touring a home would enable them to be more selective and focused in their search and make the process of finding an appropriate property for a specific customer more efficient and less time-consuming for agents.
Prohibiting agents from making this information available stifles competition, which keeps prices higher, the bureau alleged when it launched its case against TREB in 2011.
TREB has always said it's a matter of protecting the private information of all parties involved in a real estate transaction. It argued that it is legally and morally obliged to safeguard the privacy of buyers and sellers and cannot more widely release the kind of information the bureau would like to be made more accessible.
The Competition Bureau is an agency that enforces the Competition Act and other laws that regulate business and marketing practices. The Competition Tribunal is a quasi-judicial body that rules on matters brought forward by the bureau.