The Competition Bureau has lost a high-profile attempt to force the Toronto Real Estate Board to make it easier for web-based real estate brokerages to compete, a case that was being closely watched across the country.
The Bureau said late Monday that its case has been dismissed. A spokesman said that an appeal is possible.
The case, which had been years in the making, came after the Bureau accused the nation’s largest real estate board, which represents about 35,000 agents, of anti-competitive practices. It alleged that the board was unfairly keeping data about home sales away from online services that threaten to compete with real estate agents and potentially eat into their commissions.
The matter was heard by the Competition Tribunal last fall, and the decision had been pending since then.
The Tribunal’s brief order, released to parties involved in the case on Monday,suggests that the Bureau filed under the wrong section of the Competition Act, and that a case argued under a different section of the Act (under which less extensive remedies would be allowed) could have been more successful.
“This was a classic case of a legal technicality where nothing gets resolved,” said Lawrence Dale, head of real estate business at Zoocasa. “The Tribunal said the case was filed under the wrong section and has now steered the Bureau to re-file under the correct section. Once these technicalities are addressed, the fundamental issues still remain to be determined. How long that takes to get resolved is anyone’s guess.”
For its part the Toronto Real Estate Board had argued that it was upholding privacy laws and protecting the personal information of home buyers and sellers.
The case could have implications for real estate boards across the country, and the Tribunal’s decision comes at a time when home sales are now in a slump. Following a lengthy investigation the Bureau had filed its case in 2011, a year in which more than $40-billion worth of properties changed hands in the Greater Toronto Area via the Multiple Listing Service, earning the city’s real estate agents an estimated $2.2-billion. The Bureau had noted that the top five agencies earned more than 70 per cent of the commissions in recent years, with two alone – Re/Max and Royal LePage – responsible for more than 40 per cent of them.
The bureau argued that the real estate board, which operates the Toronto Multiple Listing Service system, had a stranglehold on the most accurate and up-to-date data about home sales and that rules restricting how real estate agents provide that information – including previous listings and previous sales prices – were anti-competitive because they deny agents the ability to set up new online services such as virtual office websites (VOWs). VOWs are password-protected sites on which consumers can search data on listings.
Rokham Fard, co-founder of TheRedPin.com, said that if the Bureau had won the case his firm would have been able to put data about what homes have sold for in the past online. Right now consumers can request it from an agent in person, or by email, fax or phone, but cannot look it up themselves on the web.
Editor's Note: An earlier online version of this article spelled the name Rokham Fard incorrectly. This has been corrected.