Law Times

Page 12 June 3, 2013 Law Times • FOCUS Competition Bureau stymied in TREB battle But tribunal hints at alternative to taking on Toronto Real Estate Board BY MICHAEL McKIERNAN For Law Times T he Competition Bureau faces an uphill battle as it continues its fight with the Toronto Real Estate Board over access to its multiple listings service, according to a leading Toronto litigator. The Competition Tribunal dismissed the bureau's case in April without going into the merits of the application after finding it failed to meet the requirements of the Competition Act's abuseof-dominance provisions in s. 79. According to the tribunal, the application strayed from the Federal Court of Appeal's 2006 decision in Canada (Commissioner of Competition) v. Canada Pipe Co. Ltd. The Canada Pipe rule states that the dominant company must compete with the firms harmed by its anticompetitive practices. Since all parties agreed that the real estate board, a nonprofit group serving more than 35,000 real estate brokers and salespeople, doesn't compete with its members, the application was dead, said the three-member tribunal panel that included two Federal Court judges. Interim commissioner of competition John Pecman announced in May that the bureau would appeal the case to the Federal Court of Appeal. But Brian Radnoff, leader of the appellate advocacy group at Lerners LLP in Toronto, says the bureau may stand a better chance of getting a legislative amendment than convincing the courts to take a broader approach to the law as it currently stands. "The bureau essentially had to argue that the Federal Court of Appeal wrongly decided Canada Pipe," says Radnoff. "That authority was pretty clear and binding on the tribunal. Leave to the Supreme Court was refused. That was a significant hurdle to overcome and they couldn't do it." In a statement issued with the appeal, Pecman insisted the tribunal decision involved an "overly narrow" interpretation of s. 79. "Allowing the tribunal's finding to stand could leave a significant loophole in the application of the  Competition Act,"  he said.  "While most trade associations comply with the  Competition Act, we are concerned that, if the tribunal's decision is left to stand, trade associations may be tempted to develop rules aimed at preventing or eliminating potential new forms of competition." Pecman's predecessor, Melanie Aitken, initiated the challenge against the board in 2011. She claimed its restrictive rules on the use of MLS listings and related data suppressed innovation in the sector. Board members face restrictions, for example, in their ability to provide customers with information about older listings and previous sale prices, according to the application. "It is our view that TREB's anticompetitive  behaviour continues to restrict potential homebuyers and sellers from taking advantage of a greater range of service and pricing options when making one of the most significant financial transactions of their lives," said Pecman in his statement. Before the tribunal, the bureau argued it shouldn't consider Canada Pipe to be binding because not all of the anticompetitive behaviours listed under s. 78 of the Competition Act specifically stated that the conduct must harm a competitor. In addition, it argued the list wasn't exhaustive and therefore left open the possibility of including abusive conduct by non-competitors. But the panel wasn't buying it. It concluded that s. 78 was a "powerful indicator" that the UnDeRstAnD how the lAw Applies At the locAl level ThE OnTAriO MuniCipAl ACT, A COMprEhEnsivE GuidE, 2nd EdiTiOn VIrGInIA MacLeAn AnD John ToMLInSon Understand how the law applies at the local level with this especially reader-friendly second edition of John George Chipman's Comprehensive Guide, now under new authorship. 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AvAilAble Risk-FRee FoR 30 DAys Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 CANADA LAW BOOK® www.lawtimesnews.com Canada Pipe rule was the correct approach. It noted in its decision that eight of the nine examples in the section expressly referred to harm experienced by competitors while the ninth wasn't necessarily inconsistent with the rule. "The tribunal has also concluded that the fact that s. 78 uses the word 'includes,' and therefore does not provide an exhaustive list of anticompetitive acts, does not support the commissioner's view that s. 79 covers abusive conduct by entities other than competitors. Given the strong theme already present in the examples in s. 78, we have concluded that it is unreasonable to speculate that the requirement for harm to a competitor would not be present if other anticompetitive acts were to be identified in the future," the tribunal panel added. The tribunal also found that the application didn't fall under the commissioner's own abuseof-dominance guidelines released less than a year ago since they do "not clearly state that the dominant party need not compete in the market." After dismissing the case, the tribunal observed that the commissioner may have an alternate avenue in the pursuit of the board. Under s. 90.1 of the Competition Act, the tribunal suggested the bureau could seek an order prohibiting people on its board of directors, who do compete with members, from enforcing the MLS restrictions. However, it acknowledged that the remedies available under that section are "less extensive." Radnoff says the drafters of the Competition Act, and in particular its abuse-of-dominance provisions, may never have considered the unique fact situation at play in this case. "It's not your normal case of a dominant player hurting other competitors. Here you have a professional association setting rules for its own members that have the effect of limiting competition," he says. "This is a significant issue because I have no doubt that the real estate board's control over MLS information does very much restrict competition in the market. I can understand why the commissioner has chosen to pursue it." Although the case never reached the merits stage, Don Affleck, who represented the board before the tribunal, denies the MLS rules restrict competition in the marketplace. "Everything is available to sell real estate that a realtor would need," says Affleck of Affleck Greene McMurtry LLP. He says privacy concerns explain the board's decision to limit the information available to the public about historic sale prices using the MLS. "When you sell your home, do you want everyone on your street with access to a computer to find out what you got for it?" he asks. LT

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