Canadian watchdog warns of potential collusion on WhatsApp, Signal, and Snapchat
Canada’s Competition Bureau has issued a warning to landlords and property managers about potential illegal price-fixing activities on messaging platforms such as WhatsApp, Signal, and Snapchat, raising concerns about anti-competitive behaviour in the country’s rental market.
“The Competition Bureau is aware that some landlords and property managers may be engaging with their competitors, including through discussion groups on social media,” the watchdog said in a bulletin issued June 25. “While some discussions between competitors may be justified, others could be illegal.”
The agency stressed that agreements to fix prices are criminal offences under Canada’s Competition Act and may result in prison time. While the Bureau did not disclose specific cases under investigation, it confirmed that tips and other information point to possible collusion taking place in private online chat groups.
“These are very private groups of people, that’s the modus operandi,” said Pierre-Yves Guay, deputy commissioner of the cartels directorate. “If there are very secretive price-fixing agreements, these actors try to mask their dealings.
“I can tell you we are looking very seriously into certain markets in Canada. The warning is to make sure people understand this is high risk. Eventually, we will detect it.”
Read more: Canada investigates 'Rent Cartel' allegations
Although the Bureau has brought past cases in the real estate sector, including prosecutions involving condo renovation firms and digital services access by the Toronto Regional Real Estate Board, it has not previously filed criminal charges for rental price collusion.
Some landlords and property managers have responded with skepticism.
“We don’t participate in any industry pricing discussions or forums, and frankly, we have no need to,” said Nathan Levinson, CEO of Royal York Property Management, which oversees more than 25,000 rental units in the Toronto area.
He explained that clients determine rent prices based on real-time market data provided through proprietary software.
“What we do provide is powerful proprietary software and data tools,” Levinson told The Globe and Mail. “These tools help pull all the data from MLS listings, internal rental history, and thousands of private listings not publicly available. These tools allow landlords to make smart pricing decisions based on real-time market evidence.”
In the United States, data-driven rental pricing tools have already triggered legal action. The US Department of Justice is currently prosecuting RealPage Inc. and several landlords over alleged collusion via algorithmic pricing models. Guay said the Canadian Bureau is monitoring the case closely.
While Canada has yet to see evidence of organized pricing manipulation on the same scale, tenant advocates warn that misuse of private landlord forums is not new.
“During COVID – during the eviction moratorium and rent freezes – we started hearing from tenants and other clinics about landlords going onto these chats about how to break the law and circumvent the law, for example illegally locking tenants out,” said Dania Majid, a staff lawyer at the Advocacy Centre for Tenants Ontario (ACTO). “It doesn’t surprise us… This type of bad advice is a type of collusion.”
Experts suggest that any attempts at rent-fixing would likely be more effective in smaller markets dominated by a few landlords, rather than large, diverse cities.
“In the Canadian context, this applies much more to the landlords and property managers of high-rise buildings, especially outside of large urban centres,” said Brandon Sage, real estate investment adviser at LandLord Property & Rental Management Inc. “In Toronto, most rentals are owned by almost as many landlords.”
Guay agreed, noting that market concentration can increase the risk.
“If you have landlords or property managers that have a lot of market power… the more power you have and the more likely you’ll be able to make it stick,” Guay said.
Even as national asking rents show signs of softening, regional disparities remain. According to Rentals.ca, Toronto one-bedroom rents declined 7% year over year in May, while Ajax, Ont., saw annual gains of 7.8% for the same unit type.
Ben Myers, president of Bullpen Research and Consulting Inc., cast doubt on widespread collusion in high-density urban centres.
“From a Toronto lens, it is hard to believe that there are enough willing participants with enough units to truly have an impact on the market,” he said.
Sabine Ghali, managing director of Buttonwood Property Management, added that competitive tenant behaviour further discourages rent manipulation.
“Tenants are very well educated; there’s so much information and resources for them. From what I’ve seen if you’re not competitively priced, tenants are so good at jumping to the building next door,” Ghali said.
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