Canada's Competition Bureau announced today that it is suing the country's largest real estate board

Melanie Aitken (Photo: Couvrette/Ottawa)
Canada's Competition Bureau announced today that it is suing the country's largest real estate board for alleged anti-competitive behavior that are denying consumer choice and the ability of REALTORS® to introduce innovative real estate
brokerage services through the Internet, the bureau alleged keeps the costs of buying and selling homes artificially high.

The bureau has filed an application with the Competition Tribunal against the (TREB) Toronto Real Estate Board, which represents 31,000 REALTORS®  in the Greater Toronto Area and controls access to the Multiple Listings Service® system.

The bureau says TREB's anti-competitive practices "are denying consumer choice and the ability of REALTORS®  to introduce innovative real estate brokerage services through the internet," which could result in lower prices for consumers.

The tribunal is a quasi-judicial body that makes binding decisions on issues brought forth by the bureau.

" Today, Consumers are demanding a greater selection of service and pricing options when buying or selling their homes, and many agents are eager to accommodate them," said Melanie Aitken, the commissioner of competition. "Yet TREB's leadership continues to impose anti-competitive restrictions on its members that deny consumer choice and stifle innovation."

TREB is the largest real estate board in Canada, with approximately 31,000 members REALTORS® , have the right to the use of the TRAD MARK MLS through the Canadian Real Estate Association, which represent REALTORS®  in Canada, (TREB) Toronto real estate board and its members own and operates the Toronto Multiple Listing Service® System (Toronto MLS® System). The system contains current and historical data about all residential and commercial real estate listing transaction, and is a useful tool for REALTORS®  when dealing with prospective buyers and sellers.

The bureau alleged TREB is restricting how its member agents can provide information from the Toronto MLS® system to their customers, thereby denying member REALTORS the ability to provide innovative brokerage services over the Internet.

Toronto MLS system is controlled by TREB and is only accessible to its members. It is much more detailed than one publicly viewable on REALTOR.CA. The Toronto MLS® system contains data about previous listing and sale prices, historical prices for comparable properties in the area, and the amount of time a property has been on the market, the REALTORS®.ca  website is more of an advertising site with only details of the active listing currently on the market and operated by (CREA) the Canadian real estate association

Because of TREB's restrictive practices, agents do not have the flexibility to share this important data with customers in innovative new ways, such as through password protected Web sites, also called Virtual Office Web sites (VOWs). VOWs permit a prospect buyers or sellers to search a full inventory of listings containing up to date data online, before making the decision to tour a home or attend an open house.

This enables customers to be more selective and focused, and agents to spend less time trying to find an appropriate property for a specific customer. It also sometimes contains demographic information on crime and traffic statistics, and even local hospitals and schools — detailed information agents already have access to and sometimes give out via fax or email, the bureau says

While agents can provide detailed MLS® listing information not available on REALTORS®.ca to customers by hand, mail, fax, or email, TREB's anti-competitive practices effectively prevent agents from providing the same MLS listing information to customers via a password-protected Web site. As a result, there are currently no VOWs operating in the Toronto real estate market that enable customers to search a full inventory of listings. the bureau said in a release.

That stifles competition which keeps prices higher, the bureau says.

"We think it could result in substantial rebates," an official with the bureau said.

"As general rule, more competition leads to greater choice and lower prices. We are hearing from realtors who would like to offer this service," the official said.

TREB disagrees with the bureau's view, and adds that their hands are somewhat tied when it comes to releasing information on homes for sale.

"There are consumers on both ends of a real estate transaction where contractual and private information are involved which TREB is legally and morally required to respect," the agency said in a release.

The Board has taken numerous steps to empower REALTORS®  in their use of the internet in assisting clients, TREB president Bill Johnson said. The board says it "unfortunate" that the bureau chose the tribunal route to settle the dispute — but they had no other choice, Aitken said.

When the bureau identifies anti-competitive behavior, our first preference is always to reach an agreement that fully resolves our concerns," Aitken said. "Consistent with the bureau's practice, we shared our concerns with TREB, as well as what would be necessary to address them." Ultimately, it was necessary for us to seek a legally binding order from the Tribunal to ensure greater competition and increased innovation in the market for real estate services in Toronto and the surrounding area."

The dispute is the latest salvo in a long-running dispute between the competition watchdog and the real estate industry. Last year, the consumer watchdog complained that the Canadian Real Estate Association were restricting REALTORS®  access to the MLS® system, the source of more than 90 per cent of all home sales.

Buyers and some REALTORS®  wanted the ability to opt out of certain realtor services, and simply pay to have their home listed on MLS®. That dispute eventually ended before it reached the tribunal phase, the result of which was that sellers can now list on the proprietary MLS® system for a flat rate fee.

A copy of the Bureau's application will be available shortly on the Competition Tribunal Web site.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

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