Teresa Scassa - Blog

Canada’s Federal Court of Appeal has handed down a decision that addresses important issues regarding control over commercially valuable data. The decision results from an appeal of an earlier ruling of the Competition Tribunal regarding the ability of the Toronto Real Estate Board (TREB) to limit the uses to which its compilation of current and historical property listings in the Greater Toronto Area (GTA) can be put.

Through its operations, the TREB compiles a vast database of real estate listings. Information is added to the database on an ongoing basis by real estate brokers who contribute data each time a property is listed with them. Real estate agents who are members of TREB in turn receive access to a subset of this data via an electronic feed. They are permitted to make this data available through their individual websites. However, the TREB does not permit all of its data to be shared through this feed; some data is available only through other means such as in-person consultation, or communications of snippets of data via email or fax.

The dispute arose after the Competition Commissioner applied to the Competition Tribunal for a ruling as to whether the limits imposed by the TREB on the data available through the electronic feed inhibited the ability of “virtual office websites” (VOWs) to compete with more conventional real estate brokerages. The tribunal ruled that they did, and the matter was appealed to the Federal Court of Appeal. Although the primary focus of the Court’s decision was on the competition issues, it also addressed questions of privacy and copyright law.

The Federal Court of Appeal found that the TREB’s practices of restricting available data – including information on the selling price of homes – had anticompetitive effects that limited the range of broker services that were available in the GTA, limited innovation, and had an adverse impact on entry into and expansion of relevant markets. This aspect of the decision highlights how controlling key data in a sector of the economy can amount to anti-competitive behavior. Data are often valuable commercial assets; too much exclusivity over data may, however, pose problems. Understanding the limits of control over data is therefore an important and challenging issue for businesses and regulators alike.

The TREB had argued that one of the reasons why it could not provide certain data through its digital feed was because these data were personal information and it had obligations under the Personal Information Protection and Electronic Documents Act to not disclose this information without appropriate consent. The TREB relied on a finding of the Office of the Privacy Commissioner of Canada that the selling price of a home (among those data held back by TREB) was personal information because it could lead to inferences about the individual who sold the house (e.g.: their negotiating skills, the pressure on them to sell, etc.). The Court noted that the TREB already shared the information it collected with its members. Information that was not made available through the digital feed was still available through more conventional methods. In fact, the Court noted that the information was very widely shared. It ruled that the consent provided by individuals to this sharing of information would apply to the sharing of the same information through a digital feed. It stated: “PIPEDA only requires new consent where information is used for a new purpose, not where it is distributed via new methods. The introduction of VOWs is not a new purpose – the purpose remains to provide residential real estate services [. . .].” (at para 165) The Court’s decision was influenced by the fact that the consent form was very broadly worded. Through it, TREB obtained consent to the use and dissemination of the data “during the term of the listing and thereafter.” This conclusion is interesting, as many have argued that the privacy impacts are different depending on how information is shared or disseminated. In other words, it could have a significant impact on privacy if information that is originally shared only on request, is later published on the Internet. Consent to disclosure of the information using one medium might not translate into consent to a much broader disclosure. However, the Court’s decision should be read in the context of both the very broad terms of the consent form and the very significant level of disclosure that was already taking place. The court’s statement that “PIPEDA only requires new consent where information is used for a new purpose, not where it is distributed via new methods” should not be taken to mean that new methods of distribution do not necessarily reflect new purposes that go beyond the original consent.

The Federal Court of Appeal also took note of the Supreme Court of Canada’s recent decision in Royal Bank of Canada v. Trang. In the course of deciding whether to find implied consent to a disclosure of personal information, the Supreme Court of Canada had ruled that while the balance owing on a mortgage was personal information, it was less sensitive than other financial information because the original amount of the mortgage, the rate of interest and the due date for the mortgage were all publicly available information from which an estimate of the amount owing could be derived. The Federal Court of Appeal found that the selling price of a home was similarly capable of being derived from other publicly available data sources and was thus not particularly sensitive personal information.

In addition to finding that there would be no breach of PIPEDA, the Federal Court of Appeal seemed to accept the Tribunal’s view that the TREB was using PIPEDA in an attempt to avoid wider sharing of its data, not because of concerns for privacy, but in order to maintain its control over the data. It found that TREBs conduct was “consistent with the conclusion that it considered the consents were sufficiently specific to be compliant with PIPEDA in the electronic distribution of the disputed data on a VOW, and that it drew no distinction between the means of distribution.” (at para 171)

Finally, the Competition Tribunal had ruled that the TREB did not have copyright in its compilation of data because the compilation lacked sufficient originality in the selection or arrangement of the underlying data. Copyright in a compilation depends upon this originality in selection or arrangement because facts themselves are in the public domain. The Federal Court of Appeal declined to decide the copyright issue since the finding that the VOW policy was anti-competitive meant that copyright could not be relied upon as a defence. Nevertheless, it addressed the copyright question in obiter (meaning that its comments are merely opinion and not binding precedent).

The Federal Court of Appeal noted that the issue of whether there is copyright in a compilation of facts is a “highly contextual and factual determination” (at para 186). The Court of Appeal took note of the Tribunal’s findings that “TREB’s specific compilation of data from real estate listings amounts to a mechanical exercise” (at para 194), and agreed that the threshold for originality was not met. The Federal Court of Appeal dismissed the relevance of TREB’s arguments about the ways in which its database was used, noting that “how a “work” is used casts little light on the question of originality.” (at para 195) The Court also found no relevance to the claims made in TREB’s contracts to copyright in its database. Claiming copyright is one thing, establishing it in law is quite another.

 

Note that leave to appeal this decision to the Supreme Court of Canada was denied on August 23, 2018.

 

Last year I attended a terrific workshop at UBC’s Allard School of Law. The workshop was titled ‘Property in the City’, and panelists presented work on a broad range of issues relating to law in the urban environment. A special issue of the UBC Law Review has just been published featuring some of the output of this workshop. The issue contains my own paper (discussed below and available here) that explores skirmishes over access to…