By Tony Palermo
While the Competition Tribunal has partially granted the Commissioner of Competition’s application against the Toronto Real Estate Board (TREB), it remains to be seen what the specific terms of the ruling will be. The tribunal asked both parties to submit suggested remedies and will make its final decision after both sides have had the opportunity to make oral submissions on the issue.
What we do know is the tribunal found that TREB has engaged in anti-competitive behaviour that had “a considerable adverse impact on innovation, quality and the range of residential real estate brokerage services that likely would be offered in the GTA, in the absence of the virtual office website (VOW) restrictions.”
Ken McLachlan, broker of record and owner of Re/Max Hallmark Realty, says, “I’m okay with the tribunal’s decision. “I think this (represents) the lay of the land moving forward.”
McLachlan isn’t worried about any negative impact to his business moving forward because of the tribunal’s ruling. He says while TREB might be selling information, Realtors don’t sell information. Realtors, he says, interpret and deal with information, and that’s the foundation of their value.
“The information in itself isn’t the important part,” says McLachlan. “It’s how (a Realtor) deals with the information that matters.”
Bill McMullin, CEO of ViewPoint Realty Services, Nova Scotia’s largest real estate database, agrees that the MLS data alone isn’t what most consumers want.
“Properly informed decisions on the purchase or sale of real estate takes into account a lot more than MLS data,” he says. “If it was just about sold data we wouldn’t be where we are today in terms of growth.”
When he testified as a Competition Bureau witness during the trial, McMullin attributed part of ViewPoint’s successful growth in Nova Scotia to making all relevant information available to the public. He says the stubborn position taken by TREB and real estate boards outside of Nova Scotia on providing their own members with efficient access to the MLS has been the primary impediment to the expansion of his brokerage outside of Nova Scotia.
Still, McMullin believes the market effects of the decision won’t be immediate. As he says, the Canadian real estate industry is highly fragmented, including the MLS data.
“The MLS data is under the control of over 60 real estate boards, then there’s the property data, which is controlled by the provincial governments,” says McMullin. “Even when TREB and the other boards enable their brokerage members to efficiently access their MLS, a number of significant challenges remain if a company wants to create a national real estate portal like Zillow has for the United States or ViewPoint for Nova Scotia. It takes a lot more than MLS data to create a market-leading consumer real estate portal.”
Reflecting on the decision, McMullin says it’s important to remember that this case wasn’t about public access to the MLS system as many were inclined to believe; rather, it was about members’ access to the MLS data.
“Yes, members serve the public and would like to make certain information available to the public on their websites, but the Competition Bureau was advocating for members access to the MLS data so that the members could serve the consumer better,” he says.
When asked why he thought it all came down to this, McMullin is quick to answer: “Computers don’t pay fees.”
McMullin believes some people in organized real estate have an irrational fear that the expansion of self-service, and self-directed learning and research on the web, could erode the Realtor value proposition and result in fewer Realtors.
It’s a notion he says is nonsense. “When I look at Nova Scotia, I see no evidence of that.”
Citing that the matter is still before the courts, the Competition Bureau declined to comment on any specific remedies it is considering.
TREB also had no comment beyond its already released official statement indicating that its legal counsel has received the tribunal’s decision, that no order has been issued, and that the tribunal has asked both parties to provide input regarding remedies.
CREA spokesperson Pierre Leduc says CREA continues to review the lengthy and complex decision and that they will not be in a position to fully assess the ramifications of the decision until the tribunal decides the issue of remedy and produces its order.
The hearing on the issue of remedy will take place on June 2 in Ottawa.