February 20, 2023
On February 20, 2023, the Canadian Competition Bureau (Bureau) announced that it had obtained a court order (presumably an order under section 11 of the Competition Act) in relation to potential abuse of dominance conduct engaged in by a Quebec real estate board (the Quebec Professional Association for Real Estate Brokers (QPAREB)). See: Competition Bureau obtains court order to advance an investigation of competition in Quebec real estate services market. For more information about Bureau investigations and compulsory production orders, see: Competition Law Enforcement.
In making the announcement, the Bureau stated that it was investigating whether real estate data sharing restrictions imposed by QPAREB, which operates the multiple listing service (MLS) that collects Quebec real estate transaction data that brokers and agents use as part of their real estate services, violated section 79 of the Competition Act (abuse of dominance). For more information about abuse of dominance under the Competition Act, see: Abuse of Dominance.
While the Bureau did not describe in detail the specific conduct at issue that it was investigating, real estate board-imposed restrictions on the use and access of historical MLS listing data, including historical sold prices, was the basis for the Bureau’s lengthy and ultimately successful abuse of dominance challenge of the Toronto Real Estate Board (TREB).
In the TREB case, the Bureau alleged, and was ultimately successful in establishing, that TREB MLS rules that restricted the ability of its real estate agent and broker members to make historical MLS data available to clients via online brokerage platforms (so called “virtual office websites” or “VOWs”) constituted abuse of dominance under section 79 of the Competition Act. For more information about the TREB case, see: Landmark TREB Abuse of Dominance Case May Open the Door for New Real Estate Models in Toronto.
Real estate boards across Canada operate MLS systems, a portion of the data included in which is publicly available while a signification proportion of the data (e.g., historical selling price data) is board member only data that is regulated by each local real estate board. Historically, since the advent of the web, there has been industry tension between so called traditional “bricks and mortar” brokerages and a variety of types of online business models.
In addition to the TREB case, the Bureau has commenced a number of challenges against Canadian real estate boards and associations over the past 40 years, including in relation to Board and association imposed restrictions on real estate services (e.g., in relation to The Canadian Real Estate Association’s “Three Pillars” service requirements for organized real estate broker/agent members, restrictions in board established industry codes of conduct, reciprocal commission rates offered between competing agents and advertising and marketing restrictions). Some of these challenges have resulted in Competition Tribunal (Tribunal) and criminal court decisions, while in other cases some real estate boards and associations have been subject to negotiated consent agreements with the Bureau.
It will be interesting to see whether, in this current ongoing real estate board related investigation, formal proceedings are commenced before the Tribunal and whether the Bureau’s theories of harm are similar to its past challenges in the TREB abuse case. Also, further to recent amendments to the Competition Act passed on June 23, 2022, private parties and not only the Bureau are now able, unlike before, to commence their own private access applications to the Tribunal for relief from abuse of dominance conduct. The expanded private right of access for abuse of dominance will increase the risk for entities engaging in predatory, exclusionary or disciplinary conduct that may violate section 79 of the Competition Act. For more information on these and other recent amendments to the Competition Act, see: Sweeping Canadian Competition Act Amendments Passed.
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