Competition Bureau Settles Real Estate Case Involving Canadian Re/Max Franchisees

OTTAWA, February 17, 2003 — The Competition Bureau announced today that it has settled a price maintenance case involving Re/Max Ontario-Atlantic Canada Inc. (Re/Max Ontario), Re/Max of Western Canada (1998) (Re/Max Western) and Re/Max International Inc. The settlement will enhance competition for real estate brokerage services and benefit Canadian consumers by allowing Re/Max franchisees to advertise commission rates or fees to the public.

"Buying a home is perhaps the most expensive purchase most people will ever make," said Richard Taylor, Deputy Commissioner of Competition. "The steps we have taken in this case will help ensure that all Canadians benefit from competitive real estate brokerage services."

The parties have agreed to a binding court order issued by the Federal Court of Canada under the Competition Act, requiring a change in their policies to allow the advertising of commission rates or fees. The Consent Order further prohibits Re/Max International, Re/Max Ontario and Re/Max Western from:

• adopting a policy or engaging in acts which prohibit their franchisees or their sales associates in Canada from setting independent commission rates or advertising such rates;
• attempting to influence commission rates upwards by any means; and,
• pressuring independent publishers to refuse advertising from any Re/Max franchisee or sales associate because of the commission rates advertised.

Under section 34(2) of the Competition Act, the courts can prohibit acts directed toward the commission of an offence. The Consent Order resolves the Competition Bureau's concerns with respect to Re/Max's conduct under the price maintenance provisions. The Order further requires Re/Max organizations in Canada to pay the legal costs incurred by the Crown.

"I am pleased with the outcome of this case", stated Mr. Taylor. "We have resolved our competition concerns and avoided the need for costly litigation. Advertising is important to inform consumers of competitive choices."

The Federal Court of Canada order is the result of an investigation conducted by the Competition Bureau into a policy directive issued by both Re/Max Ontario and by Re/Max Western. Under the directive, Re/Max brokers and their sales associates were prohibited from advertising commission rates. Enforcement of this policy included reminders to Re/Max brokers to follow the directive, and in some instances non-compliant Re/Max sales associates were terminated.

Under the Competition Act's price maintenance provisions, it is a criminal offence to attempt to influence upward or discourage the reduction of resale prices by threat, promise, agreement or other like means or to refuse to supply or otherwise discriminate against a person because of their low pricing policy.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

BR>For media enquiries, please contact:
André Leclair
Senior Communications Advisor
Communications Branch
819-953-4257

For general enquiries, please contact:
Information Centre
Competition Bureau
1-800-348-5358