Legal battle over websites and MLS data

If you’ve been hiding underneath a rock then you didn’t know that Canada has been experiencing a real estate boom since 2000.  As a result, many real estate companies and services have popped up.  Google’s Street View is one such service that allows you to see various cities as if you were walking the streets.  Companies promising to make searching for your next home easier have also come onto the scene.  Two in Toronto come to mind: Homezilla and Zoocasa.

Zoocasa was recently in the news as being sued by Century 21.  The case has yet to be taken to court.  However, it involves property listings that the real estate company says they own and that Zoocasa has basically stolen this information.

Well there is a case that has been before the courts.  And the judgment is in.  Toronto Realtor, Fraser Beach was suing the Toronto Real Estate Board (TREB) for wrongful termination.  Beach claimed that TREB kicked him off of the popular MLS (Multiple Listing Service) system after he had launched a discount brokerage in partnership with a Bell Canada subsidiary.  He further claimed that TREB decision was anti-competitive.

Justice David Brown has dismissed the case against TREB.  In his decision, Justice Brown found Beach violated TREB rules by downloading large blocks of information off of MLS to put on his own website. As a result he ruled that TREB was justified in cutting off Beach without warning.

However, Justice Brown did not rule on the question of anti-competitiveness.  “The issue of whether TREB’s rules and policies regarding its members’ use of the MLS database conformed to, or infringed Canadian Competition law was not for me to decide in this proceeding. My decision must be read with those limitations in mind,” he wrote in his judgment.

TREB CEO Don Richardson said Monday that they are pleased with the ruling “and feels the integrity of the MLS and the rights of sellers, consumers and brokers have been protected.”

The Competition Bureau recently determined that CREA’s rules are anti-competitive and has asked that CREA (Canadian Real Estate Association) change a number of it’s policies to reflect the Bureau’s stance.

“Justice Brown’s decision has squarely placed the issue at the feet of the Competition Bureau,” said Beach’s lawyer Lawrence Dale. “In the United States, the government found that these identical rules were anti-competitive and the Department of Justice had them removed.”

How this will impact future court proceedings is yet to be determined.  This much is apparent.  Technology’s impact on openness and collaboration on various industries is being felt.  And it is in the best interests of CREA, TREB, the real estate industry and interested observers to adapt and change to meet the demands of the marketplace.  The sooner the better.