Ruling hits city’s real estate board
Federal tribunal says realty group engages in ‘anti-competitive’ acts
Canada’s Competition Tribunal has issued a decision that some insiders say will open up the real estate industry to more online competition and services and force it to comply with federal competition rules.
The Toronto Real Estate Board (TREB) “continues to engage in, a practice of anti-competitive acts” in its restrictions surrounding the use of Multiple Listing Service (MLS) information, says a decision summary released Thursday by the tribunal.
The competition bureau argued at the tribunal that the board’s practices have kept information under the control of traditional real estate agencies, restricting the operation of industry newcomers, known as Virtual Office Websites (VOWs), and stifling innovation in the Toronto area.
In welcoming the decision, John Pecman, commissioner of competition, issued a statement saying, “This is a good day for competition and innovation. We look forward to the hearing before the tribunal on remedies.”
He first challenged the board’s MLS restrictions in 2011. That application was dismissed, but the commission successfully appealed and the tribunal held another hearing last year.
Board CEO John DiMichele cautioned that the tribunal has only “partially granted” the commissioner of competition’s application.
“The tribunal has also asked that both parties provide input to remedies,” he said in an emailed statement.
For non-traditional real estate brokers, Thursday’s release signals a major victory. They say that Canada’s real estate practices have stifled innovations such as U.S. online real estate giant Zillow.
“Finally, the market will open up,” said Lawrence Dale, a Toronto lawyer and founder of Realtysellers, who has battled the real estate board for nearly a decade.
“It will not be so easy any more for TREB and the Canadian Real Estate As- sociation (CREA) to abuse their control over the MLS to prevent competitors to the traditional model from operating as they have to date done so successfully. “Since 2002, I was stopped by either TREB and/or CREA from offering various services. Now after two bureau proceedings I have complete vindication.”
In the fall of 2007 TREB put Dale’s VOW, a partnership with Bell Canada, out of business.
“Bell valued that business at $1.4 billion after it was built out. The final chapter is now left to be written and I hope TREB and CREA can count that high,” he said.
The tribunal decision means buyers can do more of their own research rather than being dependent on a realtor, said John Pasalis, founder of Realosophy, a Leslieville VOW that offers clients data on houses and neighbourhoods that they might not find in an MLS listing.
“It matters to a business like ours because our approach is that buyers make better decisions if they have more in- formation in their hands,” he said.
“We advocate giving clients more information, which is philosophically quite different than TREB’s. TREB’s philosophy is to have the agent be the gatekeeper. Any time you want information as a consumer you have to call your realtor.”
The Competition Bureau originally brought the case before the tribunal in 2011to stop TREB from restricting agents from providing information such as previous sale prices and, it said, “thereby denying agents the ability to introduce new and innovative real estate brokerage services using the internet.”
TREB argued vigorously that releasing the information, something agents had always provided clients on a one-on-one basis, would violate privacy rights.
The full tribunal decision is confidential. Both sides have until mid-May to submit their recommendations for a remedy. They have the right to appeal to the trial division of the federal court, a tribunal spokesman said.