The end: Supreme Court dismisses TREB’s application for leave to appeal in abuse of dominance case

Publication | September 2018

In a much-anticipated decision, last month the Supreme Court of Canada dismissed the Toronto Real Estate Board (TREB)’s application for leave to appeal a 2017 Federal Court of Appeal (FCA) decision, thereby ending a 7-year-long judicial dispute with the Commissioner of Competition (the Commissioner) over accusations of abuse of dominance.


Background

TREB, a trade association whose members include most real estate agents in Toronto, operates a “multiple listing service,” a system that collects and distributes information on properties and listings amongst its members. Through rules and policies it restricts how its members can provide information to their customers, a practice determined to be an abuse of a dominant position contrary to section 79 of the Competition Act.

More specifically, the dispute arose from the fact TREB prohibited its members from displaying information, such as previous listing and selling prices, on virtual offices websites (VOW). The Commissioner saw this practice as a way to lessen competition by preventing members from offering innovative and “disruptive” online brokerage services, while TREB defended the rules based on privacy concerns.

After a Competition Tribunal (Tribunal) ruling in favour of TREB1 was overturned by the FCA2 and a leave to appeal was dismissed by the Supreme Court,3 the case was returned to the Tribunal for a new hearing. The second time, the Tribunal ruled in favour of the Commissioner,4 a decision confirmed by the FCA5 and is now final following the recent Supreme Court dismissal of the case.6 Additional background information and our commentaries on previous decisions are available online here, here and here.

The decisions

In its attempts to appeal the Tribunal’s second decision in front of the FCA and Supreme Court, TREB raised arguments on more than one front. In addition to claiming that the constituent elements of the offence were not met, TREB argued that asserting copyright in its database could not constitute an anti-competitive act and imposing the disclosure of the data would raise important privacy concerns for sellers and vendors, and may even be a breach of the Personal Information Protection and Electronic Documents Act. All the arguments raised were rejected by the FCA.

Without providing reasons or commenting on the previous decisions, the Supreme Court refused to hear TREB’s appeal, therefore making the Tribunal’s ruling final and binding. TREB will now have 60 days following the dismissal of the application for leave to appeal to comply with the order.

Implications

This loss will require TREB to review its policies regarding the use and disclosure of the collected information and to allow real estate agents or brokers to communicate more data to their customers via VOWs. The Competition Bureau believes this will be beneficial for consumers, as it will enable for more innovative ways to offer brokerage services in Toronto’s housing market.

Moreover, and we believe more importantly, this decision sets an important precedent for the bureau, as it recognizes that an entity exerting control over data in a way that may affect competitiveness in a market could be construed as abusing a dominant position, regardless of whether it competes in that market or not.

As such, this decision’s ramifications are not limited to the Toronto area or the real estate market, as the reasoning could be extended to any Canadian trade association or business controlling important databases and operating on a model similar to the TREB.

Footnotes

1 Commissioner of Competition v Toronto Real Estate Board, 2013 Comp Trib 9.

2 Commissioner of Competition v Toronto Real Estate Board, 2014 FCA 29.

3 Toronto Real Estate Board v Commissioner of Competition, SCC, 2014-07-24, case 35799.

4 Commissioner of Competition v Toronto Real Estate Board, 2016 Comp Trib 7.

5 Toronto Real Estate Board v Commissioner of Competition, 2017 FCA 236.

6 Toronto Real Estate Board v Commissioner of Competition, SCC, 2018-08-23, case 37932.


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