[May 09, 2014]

CollegeNET Launches Antitrust Suit Against the Common Application

CollegeNET has filed suit against Common Application for violating federal antitrust laws.

According to the complaint, "Common Application has orchestrated a sea change in the student application process, turning a once vibrant, diverse and highly competitive market into a straitjacketed ward of uniformity. … [D]iversity and competition have been virtually eliminated among 'elite' colleges, approximately 85% of whom are members of the Common Application."

The complaint further alleges: "Common Application has abused its market power in the relevant markets and conspired with its member colleges to impose naked and other restraints on competition including: price restraints (e.g., mandatory member restrictions which prevent colleges from pricing competing applications lower), non-compete agreements (e.g., mandatory member restrictions which prevent colleges from offering different benefits for any competing applications such as expedited decisions, fee waivers or scholarships), product limitations (e.g., compulsory restraints on colleges' ability to differentiate in the application process), exclusive dealing arrangements (e.g., restraints which penalize members who do not agree to use the Common Application exclusively), tying (mandatory service integration and incentive-based bundling of separate products and services) and a concerted group boycott."

According to Jim Wolfston, president of CollegeNET: "With a one-trillion-dollar overhang of student debt, and tuition continuing to race upward, the last thing coleges should be involved with is suppressing competition."

Common Application has long promoted as its purpose "to serve students by facilitating and simplifying the college application process." This purpose was directly contradicted, however, by the processing catastrophe of Fall 2013 during which Common Application provided zero live support staff to answer applicants' questions. According to Slate.com: "Common App's generally desultory attitude toward customers is symptomatic when a monopolistic middleman has control over a scarce product, in this case college acceptances."

Common Application has also long proclaimed the motive of advancing "holistic" admissions. But this good purpose has been belied by the straitjacket imposed by Common Application on the ability of its member schools to solicit through their application forms a more individualized and distinctive profile from each applicant.

According to the complaint: "Because Common Application has removed differentiation from the application form, it is easier for students to 'press the button and pay' as they file more and more forms. As submission volume consequently increases, next year's applicants are compelled to file still more forms in an attempt to increase their odds of acceptance. This self-reinforcing increase in volume not only drives increased revenue for colleges, it drives a market misperception created by the artificially higher selectivity rating published by U.S. News & World Report-a misperception that is more valuable to member schools than providing an honest accounting of motives to students, families and the public."

According to Wolfston: "If we can get the market back to a point where innovation and experiment are encouraged and allowed to flourish, there are amazing things we can do to transform college admissions into an educational experience."

About CollegeNET, Inc.

CollegeNET, Inc. builds on-demand SaaS (News - Alert) technologies that help institutions improve operational efficiency, enhance communication with constituents and save money. The company's systems are used by 1,300 institutions worldwide for event and academic scheduling, prospect and admissions management, Web-based tuition processing, instructor and course evaluation, and alumni development. Additionally, CollegeNET operates a fast-growing social network through which students create topics, write about them, and vote to determine who will win scholarships.

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