355 F. Supp. 3d 926
D. Or.2018Background
- CollegeNet (Oregon) sues The Common Application (Virginia nonprofit of 549 member colleges) alleging Sections 1 and 2 Sherman Act violations based on membership rules, bundling, tying, exclusivity, and an "equal treatment" requirement that favor Common App's processing services.
- Alleged conduct: Common App bundled data (standard application pipeline) and online processing, imposed exclusivity discounts and equal-treatment links/fees, integrated with school tools (Naviance), and moved processing in-house (CA4), which Plaintiff says reduced quality and choice.
- Relevant markets alleged: Online College Application Processing Market (U.S.), Standard College Application Data Services Market, Student Application Market and College Admissions Market (alternative Elite submarket). Plaintiff alleges Common App market shares ~60% (processing) and ~90% (data services) and high entry/switching costs.
- Claims pleaded: (1) horizontal restraints in Admissions market; (2) horizontal restraints in Processing market; (3) exclusive dealing; (4) tying; (5) monopolization; (6) attempted monopolization; (7) conspiracy to monopolize.
- Procedural posture: Defendant moved to dismiss and to transfer to E.D. Va.; district court denied both motions (after Ninth Circuit remand for antitrust injury previously). Court limited judicial notice requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a Section 1 "agreement" among member colleges | Common App is a consortium/joint venture; board of admissions officers adopts binding membership rules and annual contracts—constitutes concerted action | Membership doesn’t deprive colleges of independent decisionmaking; Common App is a single entity or voluntary platform | Court: Allegations plausibly plead an agreement; joint-venture/association can be concerted action at pleading stage |
| Horizontal restraints (group boycott/refusal to deal) affecting competition | Equal-treatment, exclusivity discounts, bundling/tying suppress competition, reduce "Net Output," foreclose rivals and disincentivize superior alternatives | Restraints do not affect price/terms for rivals; agreements would harm members too; output (applications) increased | Court: Plaintiff plausibly alleged anticompetitive effects and market power; claims survive Rule 12(b)(6) |
| Exclusive dealing / "de facto" exclusivity and foreclosure | Membership terms, exclusivity discounts, tying to data pipeline, and high switching costs create practical exclusivity and substantial foreclosure | No express long-term exclusive contracts; market entry (Coalition App) shows low barriers | Court: Allegations suffice to plead de facto exclusive dealing and substantial foreclosure at complaint stage |
| Tying (data services tied to processing) | Data services (applicant pipeline) and processing are distinct; Common App conditions access to pipeline on using its processing services (bundling/coercion) | The products are a single integrated product; no coercion/conditioning in agreements | Court: Plaintiff plausibly alleged distinct products and coercion (bundling/pricing/statements); tying claim survives |
| Monopolization / attempted monopolization / conspiracy to monopolize (Section 2) | Alleged market definitions, high shares, barriers to entry, conduct to maintain power show willful acquisition/maintenance and conspiracy | Market definition too narrow (exclude in-house/SIS, graduate/two-year programs); market share overstated; recent entry undermines barriers | Court: Market definition, shares, and barriers are plausible at pleading stage; conspiracy adequately alleged; Section 2 claims survive |
| Motion to transfer venue to E.D. Va. | N/A (Defendant seeks transfer) | Transfer is more convenient given defendant HQ, witnesses, and documents in Virginia | Court: Denied — plaintiff's Oregon forum entitled to deference (home forum), convenience factors do not strongly favor transfer |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for antitrust conspiracy pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; courts need not accept conclusory allegations)
- Am. Needle, Inc. v. Nat'l Football League, 560 U.S. 183 (associations controlled by competitors can be concerted action under §1)
- NCAA v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85 (rule of reason analysis for joint ventures and horizontal restraints)
- State Oil Co. v. Khan, 522 U.S. 3 (only unreasonable restraints unlawful under Sherman Act)
- Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (tying requires distinct products and coercion/conditioning)
- Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451 (market definition and evidence of separate service markets)
- Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (reluctance to apply per se rules where economic effects are unclear)