September 30, 2010
Earlier today, the Financial Post and others reported that The Canadian Real Estate Association (“CREA”) has negotiated a settlement (consent agreement) in the MLS abuse of dominance case. According to the Financial Post, CREA and the Competition Bureau have reached a settlement that will need to be ratified by CREA’s member real estate boards.
The Financial Post said:
“The legally binding deal will allow for home sellers to pay for only those services they want from their real estate agents. Previously, under the rules established by the Canadian Real Estate Association (CREA), consumers had to opt for an entire slate of services, a practice the Competition Bureau deemed anticompetitive.”
The Commissioner of Competition said:
“Since challenging CREA’s rules, the Bureau’s goal has always been to achieve a long-term solution that would strengthen competition in the residential real estate brokerage services market” and that the settlement would allow Canadian REALTORs to “offer the variety of services and prices that meet the needs of consumers.”
CREA said:
“[its MLS Rules did not] prevent or restrict a broad range of business models” and “In CREA’s view the consent agreement reflects this reality and would avoid unnecessary and expensive litigation proceedings.”
Earlier today, the Competition Bureau said:
“’This agreement is welcome news for Canadians’, said Melanie Aitken, Commissioner of Competition. ‘If ratified, the agreement will ensure that consumers have the ability to choose which services they want from a real estate agent when selling their home, and to pay for only those services. It also provides much-needed flexibility for real estate agents by ensuring that they have the ability to offer the variety of services and prices that meet the needs of consumers.’
In February, the Commissioner of Competition challenged, before the Competition Tribunal, anti-competitive rules imposed by CREA on real estate agents who list residential properties using the Multiple Listing Service (MLS) system. The Bureau launched its challenge after three years of discussions and several months of intensive negotiations with CREA. The Bureau agreed to resume negotiations in September after being approached by CREA’s representatives.
Under the agreement, CREA will eliminate its ability to adopt anti-competitive rules that discriminate against real estate agents who are hired by consumers only to list or merely ‘post’ a residential property on the MLS.
‘Since challenging CREA’s rules, the Bureau’s goal has always been to achieve a long-term solution that would strengthen competition in the residential real estate brokerage services market,’ added Commissioner Aitken, ‘This resolution, if ratified by CREA’s membership, achieves this goal.’”
Hearings for the CREA MLS abuse of dominance case were scheduled to begin in April, 2011. Given that a settlement has now been reached, subject to ratification by CREA’s members, the universe of contested abuse of dominance (monopoly) cases in Canada will remain extremely small, with less than ten fully contested abuse cases since the modern Competition Act was introduced in 1986.
When it is filed, the consent agreement in this important case will be available on the Competition Tribunal’s website at: Competition Tribunal. For more about this case see: The CREA MLS Abuse of Dominance Case, Hearing Dates Set for CREA Abuse of Dominance Application and Leave to Intervene Denied in CREA Abuse of Dominance Case.
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