The Supreme Court of Canada recently dismissed the application by the Toronto Real Estate Board (TREB) for leave to appeal the Federal Court of Appeal’s judgment overruling a decision of the Competition Tribunal that had dismissed the challenge of the Commissioner of Competition (the Commissioner) to certain restrictions by TREB on the manner in which its member real estate agents can disseminate information from TREB’s multiple listing service. The Commissioner’s application will therefore proceed to a hearing on the merits before the Competition Tribunal.
The proceedings date back to May 2011, when the Commissioner brought an abuse of dominance application under subsection 79(1) of the Competition Act (Canada) (the Act) against TREB, an incorporated trade association. TREB is the largest real estate board in Canada with approximately 39,000 members. TREB is said to control a multiple listing service, which contains data about sale prices, historical house prices, and the amount of time a property has been on the market. The Commissioner alleged that TREB had abused its dominance by denying its members the ability to introduce new web-based real estate brokerage services by limiting the use members are allowed to make of the listings and related data.
The Tribunal held that the abuse of dominance provisions did not apply because TREB, as an association, does not compete with its own members (or otherwise) in the market for real estate brokerage services. As such, the Commissioner could not demonstrate that the three requisite elements of abuse of dominance in Canada had been met, i.e., (i) dominance of a market, (ii)a practice of anti-competitive acts, resulting in (iii) a substantial prevention or lessening of competition.
Federal Court of Appeal (FCA) Decision
On appeal, the FCA concluded that the Act’s abuse of dominance provisions do not require that a dominant party be a competitor in the allegedly affected relevant market or that its conduct be targeted at competitors. Accordingly, the FCA concluded that the Tribunal had erred in dismissing the abuse of dominance application brought by the Commissioner against TREB.
Supreme Court of Canada Decision
TREB filed an application to the Supreme Court of Canada for leave to appeal the decision of the FCA. In July 2014, the Supreme Court of Canada dismissed TREB’s application for leave to appeal. The application will now proceed before the Competition Tribunal.
The FCA has taken an expansive view of the scope of abuse of dominance in Canada, one which potentially gives the Commissioner greater scope to bring proceedings against trade associations. The Commissioner’s application may provide the Competition Tribunal with an opportunity to clarify how the law will treat trade association rules or policies that impact the manner in which members of trade associations compete.