Dec 1, 2018

Judge refuses to dismiss case against Common App


The Common Application just received yet another setback in its multiyear legal battle with CollegeNET, the software developer behind the Coalition Application.

U.S. District Judge Marco A. Hernandez issued an order and opinion on Wednesday denying the Common App’s motion to dismiss  the CollegeNET suit, in which CollegeNET claims to have been harmed by Common App tactics designed to suppress competition and monopolize the college application market. 

"Plaintiff alleges that the challenged restraints in the membership agreement amount to a group boycott or refusal to deal in both the admissions and online college application processing markets," writes Judge Hernandez. "In other words, member colleges who would otherwise be competitors and independent decision makers in the marketplace for online application processing services have, by virtue of their membership, limited their participation in the market."

According to Law360, the judge found that CollegeNET had adequately shown that the restrictions—including linked products, exclusivity discounts and rules preventing member colleges from offering cheaper alternatives—are anti-competitive.

CollegeNET launched litigation in May 2014, alleging that the Common App dominated the college application market by forcing schools to either conform to its membership restrictions or lose potential applicants and associated revenue.  A year later, the suit was denied, but in October of last year, a Ninth Circuit panel reversed the ruling. The Common App then took the matter to the U.S. Supreme Court, which declined to take up the petition. According to court records, a new motion to dismiss was filled in July, which was denied on Wednesday. 

While the Common App argued that it has just 24 percent market share when comparing its institutional membership to the total number of colleges in the U.S., the judge referred to CollegeNET’s claim that the market share was more like 60 percent when based on the number of applications processed.

The order also denied a request from the Common Application to have the suit transferred from Oregon, home base for CollegeNET, to Virginia, where Common App corporate offices are located.
All in all, it wasn’t a good day for the Common App, which claims the suit has cost the nonprofit literally millions of dollars in legal fees.

In an email sent to Common App members last year, executive director Jenny Ricard wrote, “Our non-profit membership association has spent several million dollars defending itself against these frivolous claims” and went on to suggest that she would prefer these legal fees go toward expanding the Common App’s “outreach and access programs.”

And the legal fees have only increased as the two organizations continue to prepare for their big day in court. 

So what does all this mean for college applicants and those who advise them? First of all, the lawsuit is making colleges—about 100—that share membership with the Coalition a bit uncomfortable. This discomfort has resulted in a little foot dragging on the part of some institutions when it comes to actually launching the Coalition Application. It took the University of Virginia several years to launch its version of the Coalition Application, which it didn’t manage to get off the ground until this October—just weeks before the November 1 early application deadline for fall 2019.

The lawsuit may also be the root cause behind several colleges quietly deciding to walk away from the Coalition. It’s no secret that every application submitted through the Coalition to a college that also offers the Common App represents dollars lost to the Common Application organization.

But then again, a few colleges are beginning to complain about costs associated with the Common App, which may be trying to recoup money lost to lawyers by increasing fees associated with applications submitted through the system. Currently, fees are based on level of service which results in wildly different applications from colleges able to afford the more expensive ‘bells and whistles’ offered on the high end versus the more stripped-down applications offered at the lowest cost level. 

Finally, it takes money to innovate. After over five years on the CA4 platform, it may be time for the Common App to begin thinking about a more substantial update than simple tweaking. In this regard, a collaboration involving use of Liaison as an outside platform for the Common App’s new transfer application may be worth watching.

At the end of the day, the bad blood arising from a lawsuit pitting the two most visible application platforms against one another is doing nothing for the industry. Rumor has it that CollegeNET offered settlement terms, which the Common App has resisted so far. It’s worth noting that many of the practices causing the initial complaint have been discontinued by the Common App. But product preference has been firmly established to the point that students are still being steered by school counselors away from the Coalition, the Universal College Application and other competitors to the more familiar Common App with its exclusive and long-standing relationship with Naviance.

In the meantime, student applicants are blissfully unaware of the tensions that exist behind the scenes between the two application giants. They know the technology is different, and they generally know which colleges accept what application. But as long as they are free to choose whatever platform will best represent their credentials to colleges, there’s no reason to know more. The litigation will end eventually—most likely long after they’ve moved into freshman dorms.