By Tony Palermo

The Toronto Real Estate Board (TREB) has filed an application with the Federal Court of Appeal to stay the Competition Tribunal’s June 3 order, which requires TREB to, in part, stop its “anti-competitive practices” and not exclude sold and other disputed data from its virtual office website (VOW) feed.

Filed on July 8, if TREB’s application is granted, the move would effectively put the conditions of the order on hold until the appeal is heard and a decision rendered.



Speaking to REM for the first time since the Competition Tribunal’s ruling, TREB CEO John DiMichele says he wants to “set the record straight” and make sure that “people have the whole story.” He insists that, at no time, has his board acted in an anti-competitive manner.

“It has to be made clear that TREB has never opposed the distribution of sold data,” says DiMichele. “What we have said is the consumer, that is the buyer and seller, has a right to choose, in accordance with the law (how their personal data is released.)”

The point that is being lost, says DiMichele, is that it is the consumer’s choice to make, not anyone else’s and that privacy laws not only support this position, but require it.

“Privacy laws say that when there are new uses of information, or uses not previously identified, you have to get the consumer’s consent,” says Von Palmer, TREB’s chief communications and government affairs officer and chief privacy officer. “Regardless of what the Competition Tribunal said in its decision, TREB’s position has always been that we’ll respond according to the consumer’s wishes. We have that obligation under law.”

Palmer says studies show that the majority of Canadians would not give their consent to broad dissemination of their house’s final sale price.

A recent TREB news release points to a 2012 Angus Reid poll which, it says, finds that 75 per cent of Ontarians want the final sale price of their home to remain confidential, and that the same percentage of consumers believe that their personal information should be kept confidential by Realtors.

In responding to the argument that VOWs are just another way of doing business and shouldn’t be restricted, DiMichele disagrees.

“All you need is a valid email address and you would have unlimited access to all of this data,” says DiMichele, in explaining how a VOW would look under the Competition Tribunal’s order. “There are members of the public out there who think they can be data companies. When you work with a Realtor, access to the data is controlled. Both the Ontario Superior Court and Court of Appeal have ruled before that the Realtor acts as a buffer and controls the release of information so that it is used only for its intended purpose.”

DiMichele says according to the order, the entire archive of disputed data would be exposed, which also raises serious concerns.

“In the ʼ80s, there were no consents,” he says. “People did not contemplate the Internet.”

However, Lawrence Dale says TREB’s privacy argument is just smoke and mirrors.

“Any reasonable person would understand there is no privacy issue here,” says Dale, a lawyer who has been battling TREB for years and was instrumental in opening the door to alternative real estate brokerage models. “Privacy (laws) work to protect information from either being given out or not.”

Dale argues the disputed data is already available and given out on a daily basis by Realtors, as it has been for years. How then, he asks, can there possibly be a privacy concern?

“Look, this is about TREB controlling the way that the information is given out to restrict certain methods that the tribunal has said are illegal,” says Dale, a position also supported and successfully argued by the Competition Bureau during the tribunal hearing.

Another argument TREB disputes is that the disputed data should be made available on a VOW because the data is already available as a matter of public record.

“People say ‘well, it’s a matter of public record’ but I say the record is publically available,” says DiMichele, who says there is a clear difference. “If you want the information, you have to go down to the registry office, pay your $8 and then you get your records one at a time.”

That’s a far cry from having it all readily available on the Internet, he says.

In an emailed statement, Competition Bureau senior communication advisor Taylor Bildstein says, “The Commissioner of Competition remains focused on addressing TREB’s appeal and achieving a timely remedy to fully address the concerns raised in his application.”

As part of the tribunal’s June 3 order, TREB was to pay the Commissioner of Competition, within 30 days of the order, just more than $1.8 million to cover costs related to expert witnesses, disbursements and other legal fees. It remains unclear if TREB fulfilled this obligation. When asked if TREB complied with this part of the order, DiMichele replied “that’s in the lawyers’ hands,” and referred the question to Jeff Rosekat, one of the lawyers representing TREB in their appeal.

As of press time, Rosekat had not responded to REM’s request for comment.

The Competition Bureau also refused to comment, indicating that “as the matter is before the courts, it would be inappropriate to comment further.”

2 COMMENTS

  1. Unarguably, the single largest potential benefit that can be perceived of as a result of belonging to a trade organization is the ability of such an organization to be able to stand up and articulate the benefits of its industry, particularly in the face of external challenges. In the case of the subject challenge that was brought by the Competition Bureau of Canada the fight and the bulk of the associated costs should have been CREA’s and not TREB’s – yet, TREB took on the fight to defend, in large part, the goodwill that has been historically associated with those trademark entities that are in fact owned by CREA. All of the challenges that have been brought by the Competition Bureau of Canada have been born out to prove only one thing, for sure, and that is that as a trade organization CREA is unequivocally broken and ineffective — when it comes to the most important issues facing the real estate industry. Moreover, as it relates to the recent decision of the Competition Tribunal – which is really more of qualified narrative, does anyone see any valued leadership even now coming from CREA, or its President?

    Notwithstanding TREB’s valiant efforts, what does the real estate industry have to gag on, as a result of the vacuum created as a result of the virtual absence of leadership (CREA) in a national sense. The answer to the aforesaid question is the unadulterated nonsense, coming from the Competition Tribunal of Canada, in the form of comments like the following, on their website:

    “”The Tribunal reached that conclusion after finding, among other things, that the VOW Restrictions have substantially reduced the degree of non-price competition in the supply of MLS-based residential real estate brokerage services in the GTA, relative to the degree that would likely exist in the absence of those restrictions. Most importantly, this includes 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 VOW Restrictions.”

    The simple truth of the matter is that the above quoted paragraph from the Competition Tribunals website, is an unqualified and relatively obscure narrative that ignores Agency Law, and furthermore falls totally apart when properly qualified in the context of Agency Law! Focusing specifically on the C.T. quote : “…quality and the range of residential real estate brokerage services that likely would be offered in the GTA,..”, even the greenest recent graduate from real estate school should realize what is the major factor that dictates the: quality and range of real estate services that can be offered by a real estate brokerage, in Canada. The answer, of course, is: Agency Law. In addition, a real estate practitioner has a clear obligation to recognize where the line is that separates a: No-Agency Relationship (Customer) from a Full-Agency (Client) Relationship and when they have straddled that line sufficiently and have inadvertently created an: Implied Agency Relationship.

    Let’s be clear, VOW’s (Virtual Organization Websites) are web-based prospecting tools that initially interact with consumers on the basis of those real estate consumers being treated as but Customer’s in a No-Agency Relationship. The aforesaid reality actually dictates the: “quality and the range of residential real estate brokerage services that likely would be offered in the GTA,” , or elsewhere in Canada — in the initial instance, and remember that it is this initial instance that is being promoted by the Competition Bureau of Canada and the Tribunal. Let’s also be clear that a full blown VOW is a business model that costs more to operate than a basic website and even more than some Board or Association operated websites. Consequently, a full-blown VOW isn’t likely to be cost effective at the point where everyone has the financial and technical means to operate one — contingent on the sheer size of the brokerage. The operator of a full-blown VOW is banking on prospecting and gaining new clients preemptively away from smaller competitors who can’t manage to give the key data away, in the same online — No-Agency — format.

    It is absolutely incredible that at a time in Canada where the Premier of British Columbia has taken serious steps to rein in the real industry in her Province (a Province that has been known to have perhaps the highest industry educational standards) that the the Government of Canada through the Competition Bureau and now the Competition Tribunal have been pushing an agenda that by default has promoted the lowest standard of Agency Representation (No-Agency) over the highest standard of Agency Representation (Full-Agency).

    It is a simple an incontrovertible fact that no one, not even a department of the Government of Canada, can ignore the subject of Agency Law, vis-a-vis organized real estate, and still have the audacity to talk about and furthermore dictate by decree what is in the best interests of real estate consumers in Canada!

  2. I’m no expert when it comes to journalism. However, I believe that balanced reporting and the mentioning of key facts are of critical importance in measuring the value of the written effort, and readers having a reasonable chance of coming away with an informed opinion.

    I don’t understand why an impartial Tony Palermo would state the following: “In responding to the argument that VOWs are just another way of doing business and shouldn’t be restricted, DiMichele disagrees.” — without making it clear to the reader who exactly is making the argument: “that VOWs are just another way of doing business..” and furthermore what that argument is that would try and substantiate the notion or suggestion that: “that VOWs are just another way of doing business”

    It is also very important to note the following point, as per the Competition Tribunal’s own website: “The Tribunal has partially granted the Application brought by the Commissioner of Competition…” — paying particular attention to the use of the word: PARTIALLY.

    In addition, the following paragraph also appears on the Competition Tribunals website regarding the recent decision: “The specific terms of the Tribunal’s order will be determined after the parties have provided written submissions addressing this issue of remedy and have had an opportunity to make oral submissions on that issue.” Were it the case that TREB has been found: “Look, this is about TREB controlling the way that the information is given out to restrict certain methods that the tribunal has said are illegal,” — paying particular to the word “ILLEGAL”, why would the Tribunal be delaying or hedging its “specific terms” (decision) against what TREB may or may not be willing to acquiesce to? Were it the case that TREB had clearly done something illegal, and that such was being confirmed to be the case by the Competition Tribunal, the onus should clearly be on the Tribunal to state the required remedy pursuant to their decision — talk about smoke and mirrors!

    “The Tribunal reached that conclusion after finding, among other things, that the VOW Restrictions have substantially reduced the degree of non-price competition in the supply of MLS-based residential real estate brokerage services in the GTA, relative to the degree that would likely exist in the absence of those restrictions. Most importantly, this includes 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 VOW Restrictions.”

    The above quoted paragraph also appears on the Competition Tribunals website. From what I understand of the Competition Bureau their main mandate deals with the actual cost of things products and services in a monetary sense, so that costs are not falsely inflated. “Non-price competition” is far more subjective particularly as it relates to a service industry because the question then becomes one of which practitioner does a good job and which practitioner is deemed to be better than another. The question of “innovation” has always been the biggest “red herring” in this political grandstand because if a real estate Registrant or Practitioner were allowed to share their industry password with their clients, on a limited basis, the consumer could access the sales price data manually themselves — assuming that they don’t want the convenience of having it emailed out automatically as part of a customized search!

    Perhaps the most interesting word if not the most controversial is the Competition Tribunals use of the word “QUALITY” to advocate for VOW’s, in their online material, as part of their following narrative: “Most importantly, this includes 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 VOW Restrictions.” The Competition Tribunals use of the word “QUALITY” in the context they’ve applied it to VOW’s amounts to profound blasphemy. The highest standards or expectations our Law Courts put on the quality of service a consumer may receive is in relation to “Full Agency” Client Relationships. VOW’s by their very nature typically ingratiate themselves to consumers by initially treating them as but “Customer’s” and on a “No-Agency”basis — a much lower standard than a “Full Agency” Relationship! Industry members fully realize the significance of Agency Relationships and what their obligations are inside those relationships. However, both the Competition Bureau of Canada and the Competition Tribunal have avoided the subject of Agency Law throughout this entire spectacle — which I believe only serves to confirm this huge waste of time and money has always been more about politics than it has been about the Law!

    One of the things that would have benefitted industry members and Canadians alike would have been more in depth reporting and analysis of what was going on. In every democracy the media is key to holding our Government institutions accountable, regardless of which Government institution that may be. To assume that the Competition Bureau is on solid legal ground just because it is the Competition Bureau is fundamentally wrong because it only serves to discourage public scrutiny. We can see now how expensive a process this can be and why the average business might be tempted just to fold their tents and run, no matter what, when the Competition Bureau comes a knocking, and that is all the more reason why the media needs to remain objective and provide all the key facts, for readers to develop informed opinions.

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