Melanie Aitken (Photo: Couvrette/Ottawa)
The Toronto Real Estate Board’s response to the Competition Bureau’s complaint “offered no defence for its discriminatory treatment of TREB members who wish to operate a VOW (virtual office website), versus those who operate a traditional model,” says the bureau in its latest filing.
Commissioner of Competition Melanie Aitken rejects all of TREB’s arguments in her response, stating that while TREB “labels the Website Rules as a ‘VOW’ policy and rules, TREB continues to prevent genuine VOWs.” She says, “Brokers who wish to operate a VOW remain unable to offer the same real estate brokerage services available from a traditional broker in a ‘bricks and mortar’ setting, including providing valuable MLS information to consumers through a VOW.”
Responding to TREB’s statement that it is not in a position to control the real estate market because it is not licenced to sell real estate is “a technicality favouring form over substance,” says Aitken. “It ignores the reality that TREB’s members do compete in the market and TREB enacts and enforces its rules, policies and agreements for their benefit.”
On the question of privacy rights, she says: “TREB glosses over the fact that while its Website Rules, in purported defence of privacy rights, do not allow innovative brokers to provide consumers with valuable MLS information, TREB imposes no such restrictions on traditional brokers. If TREB is genuinely contesting the commissioner’s position on privacy grounds, then TREB’s traditional member brokers must already be in widespread violation of the very privacy rules TREB claims to be concerned about. TREB cannot have it both ways.”
Late on Friday, TREB issued a statement that says: “Contrary to what the commissioner has indicated, the privacy concerns of consumers will be adversely affected. Should Commissioner Aitken get her wish, Ontarians who use the current MLS can expect:
— Their contact information openly accessible to all on the Internet;
— Private information about the details of the property ownership made public; and
— Unrevealed personal and private details of the contract made public.”
“The Competition Bureau has completely failed to explain how it is possible to release private consumer information on the Internet without unnecessarily sacrificing consumer privacy rights,” said TREB president Richard Silver in the release. “The Commissioner continues to posture, but consumer privacy rights are too important for this kind of recklessness.”
The Competition Bureau document also says that “the copyright issues raised by TREB are not relevant to this application” and that the section of the Copyright Act quoted by TREB “does not apply to TREB’s conduct.”
Aiken says: “TREB’s practices protect the interests of the majority of its traditional, dues-paying members from the competitive threat of innovative brokers who want to use VOWs to enter or expand in the market and offer more attractive services to consumers. As a trade association, TREB has used and is using its rule-making ability and power of exclusion to maintain the status quo, stifle innovation and significantly harm competition. Those members of TREB who provide services using a traditional model benefit from TREB’s anti-competitive conduct. Those members, or potential members, of TREB who wish to innovate and deliver key MLS information to consumers through a VOW, are prohibited from doing so. As a consequence, consumers who could benefit from innovative services offered through VOWs are unable to take advantage of them.”
She says: “The commissioner pleads that TREB must enact, apply and enforce rules, policies and agreements that are the same for all brokers. To do otherwise, as the TREB MLS Restrictions provide, is discriminatory and substantially prevents or lessens competition in the relevant market.”
Realtysellers
Realtysellers Real Estate of Toronto is the second organization to ask to be part of this proceeding, after CREA’s request was made public yesterday. If granted standing at the hearing, the company will support the Competition Bureau’s application.
Lawrence Dale
“I bring a unique and distinct perspective to these proceedings as I have more experience operating and attempting to operate non-traditional brokerages than any member of TREB, having been pursing the cause for over a decade,” says Realtysellers president and CEO Lawrence Dale in an affidavit.
Realtysellers, which recently partnered with FSBO company PropertyGuys.com, is “only offering limited à la carte MLS services concentrating on the ‘sell side of the business’ such as a simple MLS posting for consumers who do not want to purchase any other brokerage services,” says Dale.
Realtysellers says that even though it has only been operating for “two months, offering very limited programs,” it is the largest non-traditional brokerage in Canada. It says it has posted more than 600 properties on realtor.ca and is “currently signing up more than 100 customers per week, with that number growing each week. Realtysellers anticipates assisting over 30,000 consumers with only its current limited program offerings in the next 12 months.
“However, Realtysellers is unable to materially expand its service offerings with the current restrictions that TREB has placed on its ability to provide the same MLS information that traditional agents and brokerages can provide to consumers by hand delivery,” says Dale. “Realtysellers does not want to provide any different information than what is provided by the traditional agents and brokers, but wants to use what Realtysellers believes is a better and more efficient delivery process for this same information, namely through the Internet in a virtual office environment as opposed to by hand in a bricks and mortar environment…
“Realtysellers can offer services to buyers and sellers at a cost substantially less than currently provided by typical traditional agents and brokerages,” says Dale.
The company is asking to be permitted to call a maximum of three witnesses if it is granted leave to intervene. It also wants to attend discovery conferences and to ask questions, and to be allowed to cross-examine witnesses at the hearing, as well as make oral and written submissions.
To see all the documents submitted in this case, click here.
