By Neil Sharma

The second day of The Commissioner of Competition v. The Toronto Real Estate Board Competition Tribunal hearing began with TREB presenting its case for Chief Justice Paul Crampton’s recusal. After a 90-minute deliberation, the panel ruled that TREB’s lawyers failed to meet the burden of proof that the Chief Justice could compromise fair hearings.

Fourteen years ago, Crampton had “two or three” vague conversations with real estate firm RealtySellers about competition laws before the company launched an anti-competition lawsuit against TREB in 2002. That was the same year Crampton departed his former law firm, Davies, Ward, Phillips and Vineberg LLP. In addition to the phone conversations, Crampton was copied in an email on April 18, 2001.

The panel determined Crampton had no further involvement in the case.



The Competition Bureau’s lead prosecutor, John Rook, opened arguments after lunchtime, asserting that TREB stifles competition in the GTA’s real estate market by monopolizing the MLS terms of use. The board’s hostile disposition towards virtual office websites (VOWs), Rook argued, stymie innovative Internet services, which hurts both consumers and TREB’s 42,000 members.

He said TREB’s conduct is reviewable under Section 79 of the Competition Act.

Rook specifically censured TREB’s defensive strategy – which posits the trade organization is protecting consumer privacy – as a smokescreen for control of the GTA real estate market, stating that about 75 per cent of the GTA’s transactions involve just a few brokerages.

“New innovative ways of doing business are bad to TREB,” said Rook, adding the organization oversaw $2.3-billion in revenues last year.

“The board has a rule prohibiting historical data online,” even though members are permitted to share information in person, by phone, fax or email, said Rook, “which is at the heart of discrimination.”

He argued that by omitting vital MLS information such as historical data, VOWs are at a competitive disadvantage and will not be able to break into the red-hot, yet cutthroat GTA market. “TREB has market power and (its) rules discriminate against VOW operators,” said Rook.

He also derided TREB for a 2012 email exchange between board members, in which one member, speaking about VOWs, wrote, “It would be akin to having knee replacement.”

Rook said, “They did this with malice and forethought.”

Lead TREB lawyer Donald Affleck said that clients entrust the organization with protecting confidential information, both personal and financial.

“Should personal information be used by just anyone with an Internet connection and an email address?” he asked.

Affleck said TREB already shares information liberally through the Internet Data Exchange (IDX), which 39,000 of its members use. “Toronto Real Estate Board members embrace it. The Toronto Real Estate Board does embrace innovation,” he said.

CREA is also involved in this case as an intervener. Lawyer Sandra Forbes, representing CREA, said, “Innovation of the Internet is not on trial here. Access to sensitive data is at stake. Virtual office websites don’t function the same way as Realtors; they don’t conduct showings and they don’t close deals.”

Moreover, Forbes said that accessing disputed information on VOWs compromises MLS credibility because no safeguards exist to prevent potentially hostile parties from accessing sensitive information.

“You click on the terms of use, accept the terms of use, provide an email address, etc. It can be accessed by anyone – and I do mean anyone.”

The first witness called to the stand by The Competition Bureau was William McMullin, founder and CEO of Viewpoint Realty Inc. The largest independent brokerage in Nova Scotia, the company closed 421 transactions in 2014. McMullin also testified at the 2012 hearing.

“We continuously look for ways to use the Internet, data and technology to facilitate trade by assisting buyers and sellers,” McMullin told the hearing panel. “I’ve never met a customer that didn’t want to know as much as they can.”

McMullin said one in three Nova Scotians is registered to Viewpoint’s website, even if they’re not all engaged in real estate trade.

Rook asked McMullin about “use and display” of information on his website. McMullin said that not all MLS information is displayed on his site. He conceded that Viewpoint has had a few privacy complaints, but said the brokerage’s website has received millions of page views.

McMullin will continue his testimony on Wednesday. Rook advised the hearing that a representative from U.S. technology-focused brokerage Redfin Realty will also take the stand this week.

Watch REM for daily updates.

7 COMMENTS

  1. “I don’t think anyone is resorting to fear mongering. Some of is are indignant about the way our private system is being targeted for misuse; nefarious or otherwise. It is a for Realtors by Realtors tool for the purposes of cooperation and technical applications such as establishing value by licensed registrants. This information is fundamentally private and requires a duty of care. It is not a public site. This trend is not rational primarily because our industry is grossly misunderstood and underestimated.” — Tina Headford Gardin.

    It’s very important that industry members pay attention to this issue (as Ms. Gardin has, as per above), because this is one of the most important issues that organized real estate has faced in its history. Given the extremely important nature of this subject matter, we should also notice that many members will be learning not only the intricate, but the fundamental details by following what is happening at the Competition Tribunal. As an industry we should’ve had, at least, the the benefit of CREA describing what they knew about the structure of existing VOW’s, so that the national membership would’ve been more informed heading into the hearing at the Competition Tribunal.

    We first need to be clear that a full-blown VOW internet platform has the capacity to offer-up all of the real estate data and more, of a Real Estate Board or Association — plus multiples thereof. The basic definition of an office is: “a room with a desk where a particular person works.” The word “office” is misleading when included within the acronym “VOW” — consequently a VOW should be regarded as a: Virtual Organization Website, given the full potential of these systems.

    Once you understand what a VOW really can be, you should consider whether it’s fair or equitable for a VOW Brokerage to be able to give basically open and free access to your Board or Association’s data (notwithstanding seller’s names) to those who have but a “customer status”, when a real estate Practitioner or Registrant is forbidden by rule and penalty from giving a client access to the same data — through the sharing of their personal pass-code to their Board or Association’s database. Since Practitioner’s and or Registrants can’t give direct access to our Board or Association database to a client, we must question the potential effect to an existing Agency Relationship, where a “Client” can gain such access as a “Customer” of a VOW.

    In a recent a high profile Canadian trial involving political figures the meaning of the simple word “lie” as in not tell the truth, was debated. Perhaps as Canadians the way that we can determine if a matter is more about politics than pure justice, is when the definition of relatively common words such as: “innovation” or “office” is seen to be as confusing to those who need to interpret these words to their benefit, as the meaning of the word “lie” can be — when someone has been caught in one.

  2. “He argued that by omitting vital MLS information such as historical data, VOWs are at a competitive disadvantage and will not be able to break into the red-hot, yet cutthroat GTA market. “TREB has market power and (its) rules discriminate against VOW operators,” said Rook.”

    I must admit that I find the above quoted statement to be so absolutely amazing that my first response to it really should have been my second. Not only is the focus or main interest of the above statement the VOW operators, but this fact is further reinforced to the extent that the Competition Bureau’s lawyer goes so as far as to acknowledge the nature of the “cutthroat GTA market.” We should consider the purpose of the Competition Act:

    “1.1 The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.”

    When we consider 1.1, of the Competition Act, the first question should be: is a full-blown VOW internet platform small enough so as to be considered not larger than a “medium sized enterprise” — when the cost of operating and launching such a system or platform is fully considered? As it relates to “competitive prices and product choices” the services provided by organized real estate should be the: “competitive ……….product choices” whereas the “competitive prices” should pertain more directly to the cost or price of a home. The Competition Bureau of Canada can’t be seen to be participating in something that could have the effect of Canadian’s paying a higher price for a home!

    The Competition Bureau of Canada has acknowledged through their lawyer at the Tribunal, that the Greater Toronto Area real estate market is already a “cutthroat GTA market.” — while at the same time, arguing that the Competition Bureau of Canada favors even more competition among organized real estates service providers. Consider the definition of “cutthroat” — the word that is being generally applied by the Competition Bureau of Canada to the real estate Registrants or Practitioner’s operating in the GTA: “marked by unprincipled practices, ruthless cutthroat competition” or to better understand the meaning of “cutthroat” we need to consider the applicable synonyms: unprincipled, immoral, Machiavellian, unconscionable, unethical, unscrupulous.

    Essentially the Competition Bureau of Canada’s lawyer has acknowledged at the Tribunal that there is a problem in the GTA, with the nature of the current competition among those real estate Registrant’s or Practitioner’s conducting business in the area, leading to a “cutthroat GTA market” Given the nature of Competition Bureau of Canada’s acknowledgment, would a reasonable person not draw from this that it was more likely that a consumer would to pay too much for a home — given the nature of the GTA market, as so described by the Competition Bureau of Canada’s own lawyer?

    This all gets back to my consistent main point. The most important way that we need to compete in Canada, as it relates to the services of organized real estate, is to compete through professionalism and increased professionalism. Only a fool would be interested in what a cutthroat might charge for their services!

  3. “New innovative ways of doing business are bad to TREB,” said Rook,

    The most controversial word being thrown around at the Competition Tribunal (needless to say) is the word “innovation”. The simplest definition of this word is: “the introduction of something new” or we could elaborate with: “a new idea, device, or method”. So what is this new idea being claimed: just giving something away [data in this case] without a required commitment from the recipient. The device involved is a computer and the method involved is the internet. The concept of give-a-ways is the oldest concept of the three elements, and we would no longer regard either: computers or the internet, as being new.

    Clearly the use of the word innovation involves the taking liberties through the use of creative license. Beyond the subject of privacy and who owns the subject data, there is the question of how making real estate data readily and freely available online effects the timing or delay of any future Agency Relationship that may develop and that may have otherwise developed sooner — were it not for the VOW concept. The aforesaid situation raises the question of: is it acceptable to potentially interfere with how or when Agency Relationships develop? The subject of Agency Law falls under Provincial jurisdiction.

    If we were to pull the shield of “innovation” off of the Competition Bureau of Canada’s war-wagon, would they not be clearly more exposed, and if the Competition Bureau of Canada was to be asked what evidence do they possess that proves consumer’s are better served by Agency Representation being potentially delayed, would the wheels on their war-wagon not depart their axles?

  4. “He argued that by omitting vital MLS information such as historical data, VOWs are at a competitive disadvantage and will not be able to break into the red-hot, yet cutthroat GTA market. “TREB has market power and (its) rules discriminate against VOW operators,” said Rook.”

    At the end of the day the question is: should the profit objectives of a few be what ends up defining the state of an entire industry? What I mean by the aforesaid is that should TREB not prevail at the Competition Tribunal every Real Estate Board or Association in Canada will have no choice but to provide information to the public in the same manner as a VOW (Virtual Organization Website). What Mr. Rook described in his above statement is an acknowledgement that the VOW’s need the come-on of giving away free data in order to be able to compete with the existing traditional brokerages. VOW’s hope that by initially giving data away that the prospects will stick around and eventually transition into a client status and do business with the brokerage. In other words, the free and open access to data is the bait. Since Boards and Associations can’t allow their members to be at a disadvantage to the deep pockets of someone who can operate a large VOW internet platform, they would have no choice but to offer the same internet product, and consequently end up redefining a fundamental structure point of the organized real estate industry.

    A VOW isn’t just a product that is about competing or a new form of competition, it is a product that if accepted by the Competition Tribunal will change the entire real estate landscape — it would have to become the standard. Should this happen, it would mean that the Competition Bureau of Canada has had a direct hand in pushing two concepts: (mere postings and VOW’s) that ultimately diminished and degraded the traditional role of the REALTOR, Registrant or Practitioner, in terms of when and how we will potentially serve real estate consumers. For an industry that has acknowledged its general need to raise the bar and become more of a professional industry, the Competition Bureau Canada’s initiatives seem entirely contrary to what should have been the goal of a higher level of professionalism, for the real estate industry. Would anyone argue against the suggestion that a REALTOR or Registrant who does their job competently and professionally really needs the same skill -sets of a property lawyer and more? if you can acknowledge the aforesaid, how could you condone any diminishing or degrading of the role or involvement of a REALTOR or Registrant as it relates to a consumer who would deal with this industry?

    Furthermore, it’s interesting that the Competition Bureau of Canada is arguing that everyone’s sale price for their home or property should be information that’s freely and openly available to anyone with the internet, but at the same time are we as Canadian’s even privy to the salary range for the: Commissioner of the Competition Bureau of Canada?

  5. What a waste of time and money. Information on sale prices is available through the registry files once a sale closes and is registered to anyone. Until a transaction closes a sale price is not a fact. And for this we expend hours upon hours arguing this in court. If a consumer wants a sale price they can simply call, text or email a Realtor. I am sure the Realtor will be glad to tell them. How many sale prices does a consumer need? I am not sure how a VOW is any better or any worse with or without a sale price before a transaction has closed. This all amounts to AVWOT.
    A Virtual Waste Of Time.

    • David,

      The reason that deep-pockets are deep, is precisely because those who wear such trousers don’t waste time or money — they play only to win, the money! Consumer’s having access to a full-blown VOW, is essentially the same as giving a Registrants pass-code away to the internal TREB database — notwithstanding the exclusion of the names of the seller’s.

      The sales price data that’s available at the land registry becomes a moot point when consumer’s have access to a full-blown VOW internet platform. In any event, having access to the sales price information at the Land Registry is like knowing how much a car sold for, when you only know the: Make, Model and Year of Manufacture and not: what’s under the hood, the kilometers, overall condition and whether it has leather seats or plastic ones.

  6. Interesting how in say… a divorce, if a lawyer worked for a firm that had dealings with the other party, that lawyer must recuse themselves and here we have a presiding judge who clearly was more then just employed by the firm but had conversations and was ‘cc’d in an email.

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