|Date Closed:||April 27, 2016|
The Commissioner of Competition launched the application in 2011. At the heart of the dispute was the Commissioner’s claim that TREB intentionally restricted how its Members could use certain MLS information (principally sold prices) on VOWs. The Commissioner alleged that TREB acted to insulate its traditional Members operating in a “brick and mortar” office from innovative VOW-based competition and online services. TREB responded that privacy legislation kept it from making sold prices more available online as the Commissioner sought. It also argued that the Commissioner had not proved all three elements of the test under s. 79: (i) that TREB controls a class or species of business in Canada, (ii) that TREB had engaged in a practice of anti-competitive acts, and (iii) that TREB’s practice had or would likely substantially lessen or prevent competition.
In a 150-page decision, the Tribunal found in favour of the Commissioner and rejected TREB’s arguments. First, the Tribunal held that TREB did control a market even if it does not actually participate or compete in the industry. The Tribunal held that a trade association, such as TREB, comes within the purview of s. 79 if it has the ability to exercise substantial market power to insulate all or some of its members from competition.
The Tribunal then examined whether TREB engaged in a practice of anti-competitive acts. It concluded that TREB had acted intentionally to exclude VOWs to insulate its Members from a disruptive form of competition in the GTA. The Tribunal also found it reasonably foreseeable that TREB’s conduct would have an exclusionary or disciplinary negative effect on VOW-based competitors as the Commissioner alleged. It dismissed TREB’s arguments about privacy as an “afterthought,” lacking evidentiary support.
Concluding that the requirements of paragraphs 79(1)(a) and (b) had been met, the Tribunal then concluded that TREB had prevented or lessened competition substantially in the market pursuant to paragraph 79(1)(c). Among other things, the Tribunal concluded that TREB had: a) adversely impacted entry into the market for brokerages that would like to offer full information VOWS in the GTA; b) undermined the ability of full-information VOWs to compete because of higher costs; c) negatively affected the range and quality of real estate brokerage services in the GTA, which would likely be considerably broader and of higher quality “but for” TREB’s conduct; and d) reduced innovation and dynamic competition.
Considering the above factors collectively, the Tribunal held that the magnitude and duration of these effects were substantial and that in the absence of an order, considerable adverse impacts were likely to continue.
Lastly, the Tribunal reviewed TREB’s claim that it owns copyright in the MLS database. In dismissing TREB’s claim, the Tribunal found based on the evidence that TREB’s compilation of data from real estate listings amounted to a mechanical exercise that doesn’t attract copyright protection.
The Tribunal prohibited TREB from engaging in the anti-competitive conduct and to take certain steps to overcome the effects of the anti-competitive conduct to date.
Bennett Jones LLP and the Department of Justice represented the Commissioner of Competition with a team that included John Rook, QC, Andrew Little, Emrys Davis and Tara DiBenedetto.
The Toronto Real Estate Board was represented by Affleck Greene McMurtry LLP with a team that was composed of Donald Affleck, QC, David Vaillancourt and Fiona Campbell.
Sandra Forbes and Michael Finley of Davies Ward Phillips & Vineberg LLP acted for the Canadian Real Estate Association, which intervened in the hearing.