The Common App has been accused of running a 'collusive cartel' in the admissions industry

Nonprofit educational organizations are not typically associated with antitrust lawsuits, but The Common Application — a nonprofit member-based organization “committed to the pursuit of access, equity, and integrity in the college admission process" — has been embroiled in a costly legal battle for the past three years.

CollegeNet, a software development company that creates web-based college applications, made a legal complaint against the Common App last year for using techniques to “monopolize the market."

According to The Chronicle of Higher Education, the Common App has historically allowed member colleges to pay significantly less per applicant if they agree to offer online applications only through the Common App. This discourages colleges from offering multiple online applications. CollegeNet alleged in the initial lawsuit that this policy has cost its company more than 200 college customers in the last 10-15 years.

In May 2015, the U.S. District Court in Portland ruled in favor of the Common App, dismissing CollegeNet's complaint. However, the company filed an appeal shortly thereafter, and oral arguments were finally held in the U.S. Court of Appeals for the Ninth Circuit on Oct. 5 in Seattle.

During the time that this pricing system was in place at the Common App, Penn Dean of Admissions Eric Furda served as the chair of the Board of Directors for the organization. Furda is no longer on the Board of Directors, but according to internet archives of the Common App website, he was continually listed as being on the board from August 2015 until as late as June 9, 2017.

Furda was also cited as the chair of the board of directors in an article on the Common App website dated Sept. 25, 2014, months after the initial lawsuit was filed. 

"I was a board member when the suit was filed, and I was chair-elect," Furda said in an email several hours after the initial publication of this article on Oct. 15. "Obviously since the case is still active I have no-further comment except that the courts dismissed the case twice."

Since the beginning of the legal proceedings, the Common App has begun the process of phasing out these pricing plans that encourage exclusivity, but CollegeNet is still suing them for using tactics that monopolize the market. 

Attorney Eric Miller, a partner of Perkins Coie, has represented CollegeNet in the courtroom. In his arguments, he alleged that the Common App’s activity was “facilitating a collusive and monopsonistic cartel among colleges as purchasers of application processing services.”

He also claimed that colleges were offering “an applicant experience that is inferior to what they would offer if they were freely competing with one another.”

Thane Scott, an attorney from the firm Morgan Lewis who specializes in antitrust cases, defended the Common App, stating that the college application market did not exhibit the characteristics of a monopoly.

“The competitive health of this market is actually quite good,” Scott said. “Price competition is robust. Quality competition is also robust.”

Scott also suggested that CollegeNet is being outperformed by the Common App because they are selling an inferior product.

“Consumers pick winners,” Scott said. “When consumers pick you, it seems like the market is working fine. When consumers pick your rival, it’s easy to say there must be something wrong with the market.” 

Although the Common App is a nonprofit organization, it consistently generates millions in revenue. In the fiscal year ending in 2015, it collected $16,826,502 in total revenue. 

CollegeNet recently developed the Coalition Application, a competitor to the Common App that Penn will accept this coming admissions cycle. 

Annie Reznik, the executive director of the Coalition Application, declined to comment because although the Coalition App is a product developed by CollegeNet, her organization is not directly involved with the lawsuit.