MLS rival joins battle against Competition Bureau

Garry Marr, Financial Post Published: Wednesday, April 07, 2010

The Canadian Real Estate Association now has a strange ally in its fight with the Competition Bureau - the owner of an independent site that aims to compete with the Multiple Listing Service.

National FSBO Network Inc. has filed a motion for leave to intervene in the case before the Competition Tribunal involving the federal watchdog and CREA, the group that represents more than 100 real estate boards across Canada and the country's 98,000 agents.

Melanie Aitken, Commissioner of the Competition Bureau, filed an application with the tribunal in February in which she referred to CREA's practices as anti-competitive.

The two sides have been battling over access to the MLS system, which is owned in Canada by CREA and which the bureau says is responsible for about 90% of residential property sales.

Last month, CREA approved new industry regulations that would give consumers some ability to decide how much or how little they use an agent on a real estate deal.

Ms. Aitken rejected the changes passed by CREA. Her plan would allow real estate agents to provide a multitude of a la carte services, including using an agent just to list on MLS.

Private sales by owners represent as much as 30% of all transactions in some centres, National FSBO says. Its application suggests the government watchdog's plan would put them out of business, thus reducing competition instead of creating room for it.

"We are not quite sure what the commissioner is trying to achieve," said Stephen Skelly, vice-president of operations with Ottawa-based National FSBO. "There is a discussion of a fee-for-service operation and that's the kind of thing FSBO businesses already provide."

Mr. Skelly's worry is that if agents list property on the MLS for a one-time fee and provide no additional service, his members won't be able to compete because the MLS has such a dominant position. He is trying to link various FSBO networks across the country and has six signed up, including GrapeVine Home Marketing Consultants in Ottawa, one of the largest in eastern Ontario.

"There is serious concern in the FSBO community that if the commissioner's application is successful, it would be very difficult for FSBO businesses to compete with agents who would have full use of the MLS and ‘related trademarks' and who would have all of the advertising and marketing recourses of CREA and its members. This could ultimately lead to the demise of FSBO businesses and the cost-effective services they provide, and effectively [create] a monopoly situation," the application states.

Neither CREA nor the bureau would comment on the application. Both sides can file a motion with the tribunal as to why or why not Mr. Skelly should be granted intervenor status.

The bureau has also received a request for leave to intervene from Lawrence Dale, the former owner of Realtysellers, which says it was prime target of CREA's anti-competitive practices.

No date has been set for the tribunal hearing.



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