Toronto Real Estate Board Stifled Competition 'With Malice And Forethought'

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TORONTO -- The Toronto Real Estate Board prevented competition and stifled digital innovation by prohibiting its realtor members from posting sales data on their websites, the Competition Tribunal says in a decision that could have reverberations throughout the country.

The quasi-judicial tribunal says it has partially granted an application made by the federal commissioner of competition in 2011 that sought to have Canada's largest real estate board prohibited from engaging in certain anti-competitive practices.

During hearings in Toronto last September, the Competition Bureau argued that the real estate board acted with "malice and forethought'' because it feared that competition from online startups could result in lower commissions for its member agents.

The board's practices prevented agents from being able to introduce new online services, the bureau argued.

The real estate board disputed the assertions, arguing that data such as what homes sold for is sensitive, and that posting it online would be a violation of consumers' personal privacy.

"This is a good day for competition and innovation."--John Pecman, Commissioner of Competition

The case has garnered widespread attention, as it's expected that it may affect how other real estate boards provide services to their customers online.

"This is a long and complex decision, and we'll be analyzing it over the next few days,'' Pierre Leduc, a spokesman for the Canadian Real Estate Association, said in an email.

In a summary of its decision posted online Thursday, the tribunal says it concluded that the restrictions imposed by the board have substantially reduced the degree of competition among real estate brokerages in the Greater Toronto Area.

The adjudicative body says there has been a considerable negative impact on innovation as the result of the real estate board's practices.

However, the full reasons for the tribunal's decision are confidential for now. A public version of the decision is expected to be released in the coming days after it has been determined what information should remain confidential, the tribunal said.

The tribunal also says it is waiting to hear from both parties regarding a remedy before it issues the specific terms of its order.

"This is a good day for competition and innovation,'' John Pecman, the commissioner of competition, said in a statement. "We welcome the decision and look forward to the hearing before the tribunal on remedies.''

The real estate board said it was still reviewing the confidential, 170-page legal document outlining the decision.

"At this time we understand that no order has been issued and that the tribunal has only partially granted the bureau's application,'' John DiMichele, CEO of the Toronto Real Estate Board, said in a statement.

DiMichele declined further comment, noting that the board has not yet had the opportunity to review the text in depth.

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