Competition Bureau investigates rules that may be limiting competition in the housing market
The Competition Bureau of Canada has obtained a court order to investigate the Canadian Real Estate Association (CREA) over possible anti-competitive practices, the agency said on Thursday.
The Bureau is examining whether CREA’s policies restrict competition among agents, particularly around commission rates and alternative listing services.
The probe focuses on whether CREA’s regulations discourage buyers' agents from offering lower commissions and if the organization’s agent cooperation policy gives larger brokerages an advantage.
According to court documents, the investigation began in June when the commissioner expressed concerns that CREA’s practices might impede competition in the real estate industry.
The court order required CREA to provide records relevant to the investigation, which could include details about its ownership of the Multiple Listing Service (MLS) and realtor.ca, where most Canadian homes are publicly listed.
While realtor.ca is open to the public, MLS systems contain proprietary data that is accessible only to agents. The Bureau has been reviewing whether limited public access to this data could be stifling competition or innovation in the real estate sector.
In a statement, the association said it’s typical for the Competition Bureau to seek a court order, and CREA is cooperating with the Bureau as part of this investigation phase.
CREA chair James Mabey said that the “rules and policies are both pro-competitive and pro-consumer,” adding that REALTORS “know the benefits of an informed consumer and promote transparency and innovation within the industry.”
Mabey also emphasized that MLS systems help facilitate transactions by connecting agents on behalf of both buyers and sellers.
CREA represents over 160,000 real estate brokers, agents, and salespeople.
The Bureau’s concerns also extend to commission rates, which are often paid by the seller’s agent to the buyer’s agent, potentially reducing buyers’ incentive to negotiate lower commissions. The Bureau argued this system may lead agents to steer clients away from listings with lower commissions, thereby reducing competitive pressures in the market.
Additionally, the probe is examining the impact of CREA’s agent cooperation policy, which took effect earlier this year.
The policy requires that real estate listings be posted on an MLS system within three days of being publicly advertised. The Bureau believes this policy might disadvantage alternative listing services by making it more challenging for them to compete with larger networks of agents.
This probe comes amid rising scrutiny of real estate practices on both sides of the border. Earlier this year, the National Association of Realtors in the US reached a settlement that removed the requirement for sellers to offer upfront compensation to buyer agents, allowing for commission negotiations.
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Canadian real estate associations have faced similar pressure, including a previous Bureau mandate that the Toronto Regional Real Estate Board (TRREB) make MLS data accessible to the public through password-protected websites.
In Quebec, the Competition Bureau is investigating the Quebec Professional Association for Real Estate Brokers (QPAREB) for potentially limiting competition through data-sharing restrictions. The Bureau is examining whether such restrictions are preventing the development of new brokerage models and innovations in online services.
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