Dive Brief:

• CollegeNET has filed a federal antitrust lawsuit against Common Application.
• The suit claims that Common Application has “virtually eliminated” diversity and competition in the applications process among elite colleges, and that it has turned “a once vibrant, diverse and highly competitive market into a straitjacketed ward of uniformity.”
• Common Application is also accused of abusing its market power by conspiring with member colleges to impose restraints on competition. CollegeNET sells software-as-a-service solutions for admissions management, tuition processing, academic scheduling, and related tasks.

Dive Insight:

In its press release announcing the lawsuit, CollegeNET even tries to tie in the student loan debt crisis and rising tuition: “With a one-trillion-dollar overhang of student debt, and tuition continuing to race upward, the last thing colleges should be involved with is suppressing competition,” says Jim Wolfston, CollegeNET president. CollegeNET points out in the lawsuit that 85% of so-called elite colleges are members of the Common Application. The alleged anti-competition practices of Common Application include price restraints, with member colleges restricted from setting lower application rates; and non-compete agreements, with members restricted from offering expedited decisions, fee waivers, scholarships, or other benefits on competing applications. Also, the lawsuit claims that Common Application enforces exclusive dealing arrangements by penalizing members who don’t use the application exclusively.