TREB, Competition Bureau present final submissions to Competition Tribunal

Lawyers for the Commissioner of Competition and the Toronto Real Estate Board (TREB) presented an overview of their final submissions to the Competition Tribunal in Ottawa Monday.

Both sides had handed in their complete written final submission package to the three-member panel days earlier.

Counsel John Rook reinforced the Competition Bureau’s position, stating it believes TREB has substantial or complete control of real estate brokerage services in the GTA; that TREB has exercised that control in a manner that has had the effect of creating or maintaining its market power to the benefit of its members; and that this has substantially lessened competition in the real estate marketplace.

He spent the morning challenging TREB’s assertion that it does not have market power and cannot influence competition in the market.

“In my submission, there is no force to (TREB’s) arguments,” said Rook, adding later that “TREB has the power to dictate the manner in which Realtors carry on business in the market and it’s beyond the balance of probability. I see no issue whether the board has market power and is exercising that market power.”

Rook also argued that TREB’s actions could be considered overwhelmingly disciplinary, predatory or exclusionary, in part, because TREB is protecting its members from allowing full information virtual office websites (VOWs).

He also dismissed TREB’s privacy concerns, citing that the information under dispute is publically available through Ontario’s land registry system; that the information is available from real estate brokers; and that there are robust consents in place from both property buyers and sellers.

TREB fell upon the privacy argument, suggested Rook, “to provide a smoke screen to avoid dealing with issues” like the disputed data and full information VOWs, even though it’s information consumers want to have and some Realtors want to make available. He pointed to Viewpoint Realty in Nova Scotia, which over the last five years has grown to become Nova Scotia’s largest real estate database. Viewpoint CEO and founder Bill McMullin attributes his success, in part, to making all information available to the public.

Viewpoint Realty’s website reinforces this position, stating to consumers, “We’re actually licensed as a brokerage in a number of other provinces but unfortunately we’re yet not able to offer Viewpoint in these provinces because real estate boards and other data suppliers want to restrict you from having convenient access to property and listing data. It seems they want to force you to call a real estate agent.”

TREB counsel Don Affleck countered by saying that private life as previous generations knew it is now just a matter of “private for how long?” He said the Canadian Charter of Rights and Freedom’s grants reasonable expectation of privacy and that western legal systems recognize this expectation.

“Do we control technology or does it control us?” asked Affleck.

Affleck challenged the Competition Bureau’s position that TREB’s VOW policy was anti-competitive, suggesting that the evidence is “clear and abundant” that the policy is neither exclusionary nor disciplinary to members or entrants who want to offer a VOW. He said there was no evidence presented to the panel that presented the competitive impact of full informational VOWs, either in Canada or the U.S.

“If (full informational VOWs) were considered a disruptive technology that would have a competitive impact on the market, surely there would be data from either the U.S. or Halifax, but no empirical data was presented at this tribunal,” Affleck said.

Affleck also spent time tackling the privacy concern by presenting a historical chronology of privacy policy development and relevant case precedent, ending with a 2012 quote from U.S. President Barack Obama: “One thing should be clear, even though we live in a world in which we share personal information more freely than in the past, we must reject the conclusion that privacy is an outmoded value. It has been at the heart of our democracy from its inception, and we need it now more than ever.”

TREB counsel David Vaillancourt spent some time addressing the economics of market power and the lessening of competition, repeating to the tribunal that the evidence shows TREB does not have any market power, nor does TREB exercise influence against its members or prevent any barriers to entry in the real estate market.

“Any barriers are set by the regulators, not TREB, and a governance structure is in place,” said Vaillancourt.

He also noted that the term “market power” has a specific technical meaning, explaining that the “guidelines say you cannot have market power where firms are competing vigorously with each other, and that is what the evidence has shown.”

Addressing copyright, Vaillancourt stated it was TREB’s position that it owns the copyright to the MLS database, adding that “it is worth stressing it is an incredibly low bar to get copyright protection.”

CREA counsel Sandra Forbes also challenged the Competition Bureau’s position that North American brokerages always provide historical MLS data whenever they are permitted to do so, as well the belief that when the data is offered by a full information VOW, it is the most accessed information. She stated that there was no evidence presented to the tribunal to show how valuable sold information was to a consumer in relation to other listing information.

She also challenged the significance of Viewpoint offering sold data on its VOW to explain the company’s success. She said not only was no evidence presented to the tribunal to suggest it played a part, but that Viewpoint’s growth and success might instead be because of the quality of its agents, effective management or its website’s innovative features.

“It’s a big leap to say that (Viewpoint) has five per cent of all current listings throughout Nova Scotia because of (sold data) on their website,” said Forbes. “There isn’t any evidence to support that.”

In addressing the popularity of Viewpoint Realty’s website in comparison to realtor.ca, Forbes repeated that there was no evidence presented to suggest it was because Viewpoint offered sold data, saying “it could be because Viewpoint is viewed as an expert in Nova Scotia.”

Addressing privacy issues, Forbes said the panel had evidence that many consumers don’t want their transactions advertised on the web or otherwise, and that, at the very least, it was debatable whether the current consent clauses were adequate enough to display the disputed information on the Internet in accordance with privacy legislation.

“CREA has a valid interest in making sure it is not associated with a violation of privacy laws and regulations,” said Forbes. “There is a difference between disputed fields being available for everyone, who may have no interest in buying or selling (real estate), or for brokers who can use the information and disseminate it their own discretion.”

At the end of the hearing, Chief Justice Paul Crampton gave TREB and the Competition Bureau until Dec. 2 to come to an agreement on costs before the tribunal renders its decision.