Competition Tribunal dismisses Competition Bureau's Abuse of Dominance Application against the Toronto Real Estate Board

April 17, 2013

On April 15, 2013, the Competition Tribunal dismissed the Competition Bureau’s application (the Application) against Canada’s largest real estate board, the Toronto Real Estate Board (TREB). The Tribunal found that the abuse of dominance provision under section 79 of the Competition Act (the Act) did not apply to the facts of the case, which pertained to TREB’s membership rules governing the use of its Multiple Listing Service (MLS) data.

The Bureau’s May 27, 2011 application requested that TREB eliminate rules allegedly denying its real estate agent members the ability to introduce Internet-based real estate brokerage services by limiting the use the members could make of the MLS listings and related data.

The Tribunal, stating that the determinative issue was the fundamental question of whether the Application met the requirements of section 79, disposed of the matter on that basis and did not address the other issues raised in the Application. The Tribunal’s primary holding pertained to the fact that TREB did not compete with its members in the market - a fact undisputed by TREB, the Commissioner and the Canadian Real Estate Association (CREA) (CREA sought and was granted intervenor standing at the Tribunal proceeding). As set out in the Federal Court of Appeal’s Canada Pipe decision, for anti-competitive conduct to be caught by section 79, the conduct must have had a negative effect on a competitor that is predatory, exclusionary or disciplinary.

The Tribunal did not accept the Bureau’s proposition that based on the language of section 78, which sets out a non-exhaustive enumerated list of anti-competitive acts, section 79 could cover abusive conduct by entities other than competitors. In the Tribunal’s view, section 78 was a “powerful indicator” that the rule in Canada Pipe was the correct approach, given the “strong theme” present in the examples of anti-competitive acts set out therein.

This decision may also have consequences for the Bureau’s recently amended Abuse of Dominance Guidelines (the Guidelines), which, while acknowledging the application of Canada Pipe, state that “certain acts not specifically directed at competitors could still be considered to have an anti-competitive purpose.” The Tribunal observed as “interesting” that the Commissioner in the Guidelines did not “clearly state that the dominant party need not compete in the market”; accordingly, the Application sought not only to extend the reach of section 79 beyond Canada Pipe, but also beyond the Guidelines.

For the reasons set out above, the Tribunal dismissed the Application. However, the Tribunal observed (without intending to suggest such an application would necessarily succeed) that section 90.1 of the Act might provide a means for the Commissioner to re-apply to the Tribunal, in which application the Commissioner could potentially seek an order prohibiting the members of TREB’s board of directors – who are competitors in the market – from enforcing the challenged TREB rules.

The Bureau stated in an announcement that it was disappointed by the Tribunal’s dismissal of its Application, and would be reviewing the decision to determine next steps.

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