My Own Pirate Radio

I’m interested in the general theme of competition and consumer advocacy, especially as it relates to Canada and the US. Having lived in both countries I find it frustrating that Canada generally lags behind the US on this point. For example, the US rolled out its National do-not-call registry in June 2003. Canada still doesn’t have one, and its looking like 2008 before we do. Or consider mobile phone number portability, which the US initiated in 2003. Canada finally rolled out MNP just a few days ago, to the sound of… well, nothing, from the mobile phone giants. They must be hoping nobody will notice.

So it was with pleasant surprise today that I read Competition Bureau officers are “talking and meeting with limited-service brokers in the United States to gauge the potential effects of real estate restrictions in Canada”. (Read the article today if you’re interested… it goes behind a subscription wall after 24 hours.) The US DOJ and FTC have been looking into anti-competitive real estate policy and legislation driven by the National Association of Realtors (NAR) and several US states for the last year or so. It’s nice to see Canada doing a fast-follow on this one.

What’s the DOJ all fussed about? Their main bone of contention is so-called “minimum service” laws, which make it illegal for real estate professionals to provide limited service offerings (which cost less) to their clients. For instance, advertising a home for sale on the MLS and allowing the customer to handle the rest of the transaction is now against the law in 10 US states. The FTC and DOJ have voiced concern about this, advising the states that such rules will probably be deemed anticompetitive. The DOJ has also filed a lawsuit against NAR objecting to “overly restrictive” online property listings policies. The battle has been joined.

Why should Canadians care? Well, it turns out that CREA, NAR’s Canadian equivalent, has been trying to impose similar rules on its member MLS organizations for the last half a year or so. The Inman article cites several Canadian discount real estate companies that are struggling in the face of CREA rules, including Realtysellers, co-founded by Stephen Moranis, ironically a former president of the Toronto Real Estate Board and director of CREA. Realtysellers announced in November 2006 that it was suspending operations pending resolution of the CREA issues.

CREA recently backed off on passing formal regulations, but it’s taking another stab at it next week, this time with its policies recast as “interpretations” of existing CREA rules. The interpretations document is up for vote at CREA’s general meeting on March 24. In a nutshell, it implies that Realtors (CREA members and trademark users) cannot provide limited service offerings, cannot “merely list” properties on the MLS, and must remain middlemen at all times in real estate transactions … whether their clients want the help or not. Furthermore, property sellers’ name and contact information cannot appear on the MLS.ca website. You can see the proposed interpretations on the Real Estate Marketing web site.

Consumer choice is good. CREA should acknowledge that and change its tune, before the Competition Bureau forces it to do so.