Law Times

Page 8 September 17, 2018 • Law timeS www.lawtimesnews.com Supreme Court declines leave to appeal in TREB case BY DALE SMITH For Law Times I n August, the Supreme Court of Canada dismissed leave to appeal in the case of the To- ronto Real Estate Board in its dispute with the competition commisioner, a case that touches on the intersection of competi- tion law and privacy. Lawyers say that the Federal Court of Ap- peal's decision could have impli- cations for how the Competition Bureau deals with the digital economy. In Toronto Real Estate Board v. Commissioner of Competition, 2017 FCA 236, TREB's decision to restrict some of its database from being use- able by its members to populate their own websites was found to disadvantage innovative brokers who would rather establish vir- tual offices. As well, TREB's arguments that restrictions were due to pri- vacy concerns and an assertion of intellectual property were dis- missed. "The Competition Tribunal's decision, which now stands, notes that dynamic competition, including innovation, is the most important type of competition, and consumers are deprived of enhanced services when TREB members are shielded from dis- ruptive competition," says Jean- Philippe Lepage, spokesman for the Bureau, in an emailed re- sponse. "The decision provides the Bureau with important juris- prudence regarding the scope of s. 79 of the Competition Act and paves the way for enforcement action dealing with non-price effects and innovation," says Lepage. TREB's counsel feels differ- ently about the case law that has resulted from the Supreme Court's decision to dismiss leave to appeal. "I think the state of the law is a little unsettled, and it would have been helpful to get Su- preme Court guidance, which is something the Federal Court of Appeal itself indicated would be useful," says Brian Facey, chair- man of the competition, anti- trust and foreign investment group at Blake Cassels & Gray- don LLP in Toronto, who acted on behalf of TREB. "The case does raise critical issues regarding Big Data and innovation versus privacy rights and intellectual property, which will remain unanswered from the top court for the time being," adds Facey. Chantal Bernier, former In- terim privacy commissioner and now of counsel with Dentons Canada LLP in Ottawa, says the privacy concerns in the decision were correctly answered by the Federal Court of Appeal. "The use and distribution of the information clause in the listing agreement was very clear — it clearly supported the exer- cise of consent toward using any medium including the internet," says Bernier. "The second reason the court says that even if it hadn't been clear about the medium, the purposes were very clear, so TREB could put [the informa- tion] on the data feed." Bernier says there is no col- lision between privacy law and competition law in general but rather complementarity — that privacy and competition regu- lators have common ground to enforce their jurisdiction be- cause both deal with the impor- tance of consumer choice. "The consumer must have a choice between various competi- tors, and in privacy law, the con- sumer must have achoice in pro- viding or not [providing] per- sonal information," says Bernier. "Both of them are converging, if not in substance but in imple- mentation and enforcement." Bernier makes the connec- tion between data portability and the portability of consum- ers in a marketplace between competitors, as well as with transparency around data ana- lytics, which has both privacy and competition consequences. James Musgrove, partner and co-chairman of the competition and anti-trust practice at Mc- Millan LLP in Toronto, who was not involved in the case, says he is particularly interested in the question of whether the actions of a trade association impeded or hurt a realtor that was not a competitor of the association. The Competition Tribunal had initially ruled that the asso- ciation wasn't a competitor and that it didn't apply. The Federal Court of Appeal ruled other- wise, saying it simply needed to compete in a market. "That reading of the word 'competitor' in my submission makes it a meaningless word," says Musgrove. "Everybody is a competitor in some market, so it takes what used to be conduct aimed at your competitor and that's read out. It can be some- thing you do [that] hurts some- body else who doesn't have to be your competitor." Musgrove says the FCA ruling in TREB opens up the grounds for abuse of dominance cases, and it may have broad implica- tions. Musgrove is also interested in the argument that TREB's claim of copyright for its data- base of the material as a defence of anti-competitive behaviour is interesting as a broader principle. "The whole point of intellec- tual property is that you have the right to use and to exclude," says Musgrove. Musgrove says the case does speak to the Bureau seeing that its traditional powers and man- date to protect the economy from anti-competitive conduct apply with as much and possibly more force to protecting innova- tion in the digital economy. Dominic Thérien, partner at McCarthy Tétrault LLP in Mon- treal, who was not involved in the case, says that another result of the FCA decision is that in an abuse of dominance case, the commissioner of competition can make its case solely on the basis of qualitative evidence and not quantitative evidence as to whether there's a substantial loss of competition. "There was no empirical analysis conducted on anti- competitive pricing effects, and that's something that TREB has been attacking since the tribu- nal decision — that there should be a burden on the commission- er to quantify what anti-com- petitive effects are out there," says Thérien. He says it can be more of a challenge to build a defence against that kind of in- formation. "It's an interesting debate to see what's the burden on the commissioner." Thérien adds that the case has important considerations for the digital economy and Big Data. "The Federal Court of Ap- peal decision confirms that controlling significant amounts of valuable data may provide a company or other organization with market power, and restrict- ing access or use of such data may constitute barriers to entry and, therefore, abuse of domi- nance," says Thérien. LT James Musgrove says the SCC ruling in TREB opens up the grounds for abuse of dominance cases and may have broad implications. FOCUS FOCUS ON Competition Law I think the state of the law is a little unsettled . . . Brian Facey In-class and online programs recognized by Law Societies Executive Education to Navigate the Canadian Legal Landscape Visit Lexpert.ca to find out more

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