The crux of the bureau’s contentions against CREA: that CREA is restricting competition in the residential real estate market and limiting consumer choice.

By Kathy Bevan

mlsThe Competition Bureau’s decision to take CREA before the Competition Tribunal to determine the future of MLS access may not have been welcomed by CREA’s leadership team, but a vocal segment of the association’s membership fully supports the idea of having CREA getting its day in court before the quasi-judicial body.

A number of comments posted on REM’s online Forum leading up to the Competition Bureau’s announcement on February 8 that it was ceasing negotiations and seeking a formal tribunal hearing are highly critical of any negotiations regarding access to CREA’s trademarked MLS system. 

“I cannot believe anybody or any organization would agree to entertain negotiations over the MLS system, which as so many of the Realtors have expressed, we support (and) pay for…This is our MLS system and it is not for sale!” one Realtor posted.  Another wrote, “My main concern with negotiating with the bureau is that it appears that we are admitting to doing something wrong…If we in the industry (have) done harm to the public or individuals, then we should be accountable to them in a court of law…Take me to court any day.”  A third comment:  “The simple answer is to take back our website. We pay for it, we own it, let’s stop giving the public access.  Information equals money, why are we giving away our money?”

CREA had been in negotiations with the Competition Bureau since last October, when the bureau announced, based on the findings of its three-year investigation into CREA’s access rules regarding its trademarked MLS system, that it wanted key sections of those access rules removed. 

The crux of the bureau’s contentions against CREA are essentially the same as it expressed last October – that through CREA’s control of the MLS system and the limits it places on MLS information that is shared with consumers via CREA’s public website, CREA is restricting competition in the residential real estate market and limiting consumer choice. 

In the Notice of Application filed with the Competition Tribunal, Melanie Aitken – the Commissioner of Competition – alleges that the restrictions CREA places on MLS access “impose minimum service requirements” on brokers and salespeople “which lessen or prevent competition substantially.” As a consequence, Aitken claims that consumer choice is being restricted as well, “…leaving consumers with only one option if they want to sell their home using the MLS system – they must hire a real estate broker (salesperson) who will and must, because of the MLS restrictions, provide a bundle of services that includes services the consumer may not want to receive or pay for.” While Aitken acknowledges other options exist for marketing homes for sale, she says “they are not adequate substitutes for an MLS listing.”   

In its tribunal filing, the bureau singles out four key conditions contained in CREA’s existing MLS rules:  CREA’s “Agency” rule and MLS Interpretations 1, 3 and 6.  CREA, in its defence, says it had already notified the bureau that it was in the process of redrafting its MLS rules for presentation to its March AGM, to try to address the bureau’s concerns. 

Those drafted changes include a significant revision to the “Agency” provision, as well as complete deletions of two of the three Interpretations that the bureau has cited in its filing with the tribunal.  In a dispatch to CREA members issued the same day as the bureau filed notice with the tribunal, CREA president Dale Ripplinger laid out a draft of the proposed revisions to the Interpretations, which will be introduced at CREA’s March AGM. 

Key among CREA’s MLS access revisions:  the removal of Interpretation 1 – “The listing Realtor shall receive and present all offers and counter offers to the seller” – and Interpretation 3 – “The ‘mere posting’ of property information in an MLS system is contrary to CREA’s Rules. A ‘mere posting’ occurs when the listing agreement relieves the listing member of any obligations under the Rules, including the obligation that the listing Realtor remain the agent of the seller throughout the term of the listing contract.” 

If CREA’s draft proposals are approved at the March AGM, only one of the three Interpretations specifically targeted by the bureau will remain in effect. That one – Interpretation 6 – is where CREA appears to be digging in, although its draft revisions do include rewording for clarification. In essence, Interpretation 6 states that only the listing Realtor’s name and contact information may appear on CREA’s public website,; contact information about the seller cannot be included. 

Interpretation 6 is the same provision that CREA said last October it was still unclear about in terms of potential impacts from the changes being proposed by the Competition Bureau.  “Removing Interpretation 6 would mean that buyers’ agents would be able to get sellers’ contact information directly from an MLS listing(s) instead of having to contact the listing agent,” Ripplinger wrote to members at that time, adding, “We are still exploring the full effect of deleting this Interpretation.”

Up until the bureau ceased negotiations, Ripplinger was hopeful that CREA and the bureau would be able to reach an agreement. Just the week before the bureau announced it was taking its case to the tribunal, Ripplinger told REM that “both sides have worked incredibly hard to reach a solution” and “fortunately, we are not all that far from an agreement”, although he did mention that “there are still a couple of issues of significance.”  He also added a cautionary note:  “To use an analogy that Realtors will understand, we’ve all seen a house sale fall apart over appliances.”

Much like a failed real estate transaction, there is no guarantee that the ultimate resolution of this dispute will completely satisfy either side.  No date has yet been set for the Competition Tribunal hearing, when both CREA and the bureau will get to formally present their arguments.

To view the Notice of Application in PDF format, click here.

Posted: 2010-02-15 08:59:44

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