DEFENDANT’S MOTION TO DISMISS FIRST AMENDED COMPLAINT; MEMORANDUM OF LAW 

A/76570733.7 

Thomas M. Triplett, OSB #651256 

Email: ttriplett@schwabe.com

Richard K. Hansen, OSB # 832231 

Email: rhansen@schwabe.com

Román D. Hernández, OSB # 011730 

Email: rhernandez@schwabe.com

SCHWABE, WILLIAMSON & WYATT, P.C. 

1211 SW 5th Avenue, Suite 1900 

Portland, Oregon 97204 

Telephone: 503.222.9981 

Facsimile: 503.796.2900 

Thane D. Scott, Pro Hac Vice 

Email: thane.scott@morganlewis.com

MORGAN, LEWIS & BOCKIUS LLP 

One Federal Street 

Boston, Massachusetts 02110-1726 

Telephone: 617.951.8000 

Facsimile: 617.345.5005 

Frank M. Hinman, Pro Hac Vice 

Email: frank.hinman@morganlewis.com

Sujal J. Shah, Pro Hac Vice 

Email: sujal.shah@morganlewis.com

Susan J. Welch, Pro Hac Vice 

Email: susan.welch@morganlewis.com

Dominique Malata Perez, Pro Hac Vice 

Email: dominique.perez@morganlewis.com

MORGAN, LEWIS & BOCKIUS LLP 

Three Embarcadero Center 

San Francisco, California 94111-4067 

Telephone: 415.393.2000 

Facsimile: 415.393.2286 

Attorneys for Defendant The Common Application, Inc. 

 

Case 3:14-cv-00771-HZ Document 80 Filed 12/23/14 Page 1 of 41
DEFENDANT’S MOTION TO DISMISS FIRST AMENDED COMPLAINT; MEMORANDUM OF LAW 

A/76570733.7 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

COLLEGENET, INC., a Delaware 

corporation 

No. 3:14-cv-00771-HZ 

 Plaintiff, DEFENDANT THE COMMON 

APPLICATION, INC.’S MOTION TO 

DISMISS THE FIRST AMENDED 

COMPLAINT; MEMORANDUM OF LAW 

 v. 

THE COMMON APPLICATION, INC., 

a Virginia corporation 

 Defendant. ORAL ARGUMENT REQUESTED 

Case 3:14-cv-00771-HZ Document 80 Filed 12/23/14 Page 2 of 41
TABLE OF CONTENTS

Page

-iA/76570733.7 

I. INTRODUCTION ............................................................................................................. 1 

II. FACTS ............................................................................................................................... 4 

A. The Parties ............................................................................................................. 4 

B. Alleged Competitive Effects Of TCA’s Challenged Conduct ............................... 6 

III. LEGAL STANDARD ........................................................................................................ 8 

A. Rule 12 ................................................................................................................... 8 

B. Foundational Antitrust Principles .......................................................................... 9 

1. Consumer Welfare Is the Touchstone of Antitrust Law .......................... 10 

2. Antitrust Laws Protect Competition, not Competitors ............................ 11 

3. Consumer Welfare Is Enhanced, not Injured, by Practices that 

Maximize Output and Minimize Price ..................................................... 12 

IV. THE FAC SHOULD BE DISMISSED FOR FAILURE TO STATE A CLAIM ........... 14 

A. CollegeNET Admits Lower Prices And Higher Output, So It Cannot 

Allege Harm To Competition As A Matter of Law ............................................. 14 

B. The Two Cornerstones Of CollegeNET’s FAC Do Not Make Economic 

Sense and Fail To Salvage Its Case ..................................................................... 17 

1. CollegeNET’s Fabricated Concept of “Net Output” Is an Antitrust 

Non-Starter ............................................................................................... 17 

2. CollegeNET Cannot Allege TCA’s Lower Prices Are 

Anticompetitive Because Its Buyers’ Cartel Claim Is Unsupported 

as a Matter of Law ................................................................................... 20 

C. CollegeNET’s Challenged Restraints Do Not Injure Competition Or 

Consumer Welfare As A Matter of Law .............................................................. 24 

1. The “Exclusivity Restrictions” Are Per Se Legal Discounts and, in 

Any Event, Do Not Foreclose a Substantial Share of The Market .......... 24 

2. CollegeNET Fails to State a Claim Based on the Alleged “Tying 

and Bundling/Forced Purchase Requirements” ....................................... 27 

3. The “Equal Treatment” Requirement Is Not Exclusionary or a 

Group Boycott .......................................................................................... 30 

4. TCA’s “Uniformity Requirements” Are Procompetitive as a Matter 

of Law ...................................................................................................... 31 

V. CONCLUSION ................................................................................................................ 34 

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Adaptive Power Solutions, LLC v. Hughes Missile Sys. Co., 

141 F.3d 947 (9th Cir. 1998) ...................................................................................................18 

Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP, 

592 F.3d 991 (9th Cir. 2010) .............................................................................................24, 26 

Am. Ad Mgmt., Inc. v. GTE Co. of Cal., 

190 F.3d 1051 (9th Cir. 1999) ......................................................................................... passim

Apple, Inc. v. Psystar Corp., 

586 F. Supp. 2d 1190 (N.D. Cal. 2008) .....................................................................................8 

Atl. Richfield Co. v. USA Petroleum Co., 

495 U.S. 328 (1990) ......................................................................................................... passim 

Baum Research & Dev. Co. v. Hillerich & Bradsby Co., 

31 F. Supp. 2d 1016 (E.D. Mich. 1998) ...................................................................................33 

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007) .........................................................................................................8, 9, 26 

Blades v. Monsanto Co., 

400 F.3d 562 (8th Cir. 2005) ...................................................................................................19 

Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 

441 U.S. 1 (1979) ...............................................................................................................13, 16 

Brooke Grp. v. Brown & Williamson Tobacco Corp., 

509 U.S. 209 (1993) ......................................................................................................... passim

Cal. ex rel. Harris v. Safeway, Inc., 

651 F.3d 1118 (9th Cir. 2011) .................................................................................................10 

Campfield v. State Farm Mut. Auto. Ins. Co., 

532 F.3d 1111 (10th Cir. 2008) ...................................................................................20, 21, 22 

Charley’s Taxi Radio Dispatch Corp. v. SIDA of Hawaii, Inc., 

810 F.2d 869 (9th Cir. 1987) ...................................................................................................31 

Clamp-All Corp. v. Cast Iron Soil Pipe Inst., 

851 F.2d 478 (1st Cir. 1988) ....................................................................................................32 

Case 3:14-cv-00771-HZ Document 80 Filed 12/23/14 Page 4 of 41
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Collins v. Associated Pathologists, Ltd., 

844 F.2d 473 (7th Cir. 1988) ...................................................................................................29 

ECOS Elecs. Corp. v. Underwriters Labs., 

743 F.2d 498 (7th Cir. 1984), cert. denied, 469 U.S. 1210 (1985) .................................. passim

Epstein v. Wash. Energy Co., 

83 F.3d 1136 (9th Cir. 1996) .....................................................................................................8 

Expedite, Inc. v. Plus, Bags, Cars & Serv, LLC, 

2011 WL 6399460 (D. Or.)............................................................................................2, 12, 16 

Golden Bridge Tech., Inc. v. Motorola, Inc., 

547 F.3d 266 (5th Cir. 2008) ...................................................................................................32 

Handicomp, Inc. v. U.S. Golf Ass’n, 

2000 WL 426245 (3d Cir.).......................................................................................................30 

Hirsh v. Martindale-Hubbell, Inc., 

674 F.2d 1343 (9th Cir. 1982) .....................................................................................10, 27, 28 

Ill. Tool Works Inc. v. Indep. Ink., Inc., 

547 U.S. 28 (2006) ...................................................................................................................29 

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 

466 U.S. 2 (1984), abrogated on other grounds, Ill. Tool Works Inc. v. Indep. 

Ink., Inc., 547 U.S. 28 (2006).............................................................................................25, 27 

Montgomery Cnty. Ass’n of Realtors, Inc. v. Realty Photo Master Corp., 

783 F. Supp. 952 (D. Md. 1992), aff’d, 993 F.2d 1538 (4th Cir. 1993) ..................................28 

NCAA v. Bd. of Regents of Univ. of Okla., 

468 U.S. 85 (1984) .............................................................................................................10, 12 

Nat’l Soc’y of Prof’l Eng’rs v. United States, 

435 U.S. 679 (1978) .................................................................................................................22 

Nelson v. Monroe Reg’l Med. Ctr., 

925 F.2d 1555 (7th Cir. 1991) .................................................................................................12 

NicSand, Inc. v. 3M Co., 

507 F.3d 442 (6th Cir. 2007) ................................................................................................... 25

Oil Exp. Nat., Inc. v. D’Alessandro, 

1998 WL 214727 (N.D. Ill.) ....................................................................................................21 

Omega Envtl., Inc. v. Gilbarco, Inc., 

127 F.3d 1157 (9th Cir. 1997) ...............................................................................13, 16, 25, 26 

Case 3:14-cv-00771-HZ Document 80 Filed 12/23/14 Page 5 of 41
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Omnicare, Inc. v. UnitedHealth Grp., Inc., 

629 F.3d 697 (7th Cir. 2011) ...................................................................................................20 

Parrino v. FHP, Inc., 

146 F.3d 699 (9th Cir. 1998), superseded by statute on other grounds as 

stated in Abrego Abrego v. Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006) ..............................9 

PNY Techs., Inc. v. SanDisk Corp., 

2014 WL 1677521 (N.D. Cal.) ................................................................................................26 

Pool Water Prods. v. Olin Corp., 

258 F.3d 1024 (9th Cir. 2001) .....................................................................................12, 13, 16 

Princo Corp. v. ITC, 

616 F.3d 1318 (Fed. Cir. 2010) (en banc)..........................................................................32, 33 

Rebel Oil Co. v. Atl. Richfield Co., 

51 F.3d 1421 (9th Cir. 1995) .......................................................................................11, 12, 13 

Reudy v. Clear Channel Outdoors, Inc., 

693 F. Supp. 2d 1091 (N.D. Cal. 2010), aff’d sub nom. Reudy v. CBS Corp., 

430 F. App’x 568 (9th Cir. 2011) ..................................................................................... passim

Rick-Mik Enters. Inc. v. Equilon Enters., LLC, 

532 F.3d 963 (9th Cir. 2008) .............................................................................................27, 29 

Sewell Plastics, Inc. v. Coca-Cola Co., 

720 F. Supp. 1196 (W.D.N.C. 1989), aff’d and remanded for further 

proceedings on counterclaims, 912 F.2d 463 (4th Cir. 1990) .................................................23 

Sprewell v. Golden State Warriors, 

266 F.3d 979 (9th Cir. 2001), amended on other grounds, 275 F.3d 1187 (9th 

Cir. 2001) ...............................................................................................................................8, 9 

Stamatakis Indus. v. King, 

965 F.2d 469 (7th Cir. 1992) .................................................................................11, 12, 19, 21 

Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield, 

373 F.3d 57 (1st Cir. 2004) ................................................................................................25, 26 

Tampa Elec. Co. v. Nashville Coal Co., 

365 U.S. 320 (1961) .................................................................................................................24 

Tanaka v. Univ. of S. Cal., 

252 F.3d 1059 (9th Cir. 2001) .......................................................................................8, 18, 22 

Triple M Roofing Corp. v. Tremco., Inc., 

753 F.2d 242 (2d Cir. 1985)..................................................................................................... 12

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United States v. Microsoft Corp., 

253 F.3d 34 (D.C. Cir. 2001) ...................................................................................................25 

United States v. Phila. Nat’l Bank, 

374 U.S. 321 (1963) .................................................................................................................19 

United States v. Syufy Enters., 

903 F.2d 659 (9th Cir. 1990) ................................................................................................... 30

Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 

549 U.S. 312 (2007) ...........................................................................................................13, 20 

William O. Gilley Enters. v. Atl. Richfield Co., 

588 F.3d 659 (9th Cir. 2009) .....................................................................................2, 9, 18, 33 

Witt Co. v. Riso, Inc., 

948 F. Supp. 2d 1227 (D. Or. 2013) (Hernandez, J.) ........................................................... 8, 30

Yang v. Dar Al-Handash Consultants, 

250 Fed. Appx. 771 (9th Cir. 2007) ........................................................................................... 9

Rules 

Fed. R. Civ. P. 12 ................................................................................................................... passim

Other Authorities 

Phillip E. Areeda and Herbert Hovenkamp, Antitrust Law (3d ed. 2008) ............................. passim 

Phillip E. Areeda and Herbert Hovenkamp, Antitrust Law (4th ed. 2013) ...................................10 

Phillip Areeda and Donald F. Turner, Predatory Pricing and Related Practices 

under Section 2 of the Sherman Act, 88 Harv. L. Rev. 697 (1975) ...................................11, 19 

Robert H. Bork, The Antitrust Paradox (1978)........................................................................10, 11 

Case 3:14-cv-00771-HZ Document 80 Filed 12/23/14 Page 7 of 41
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COMPLIANCE WITH LR 7-1 

Pursuant to LR 7-1, counsel for Defendant The Common Application, Inc. certifies that a 

good faith effort to confer with Plaintiff’s counsel concerning the issues raised in this motion 

was made prior to filing this motion, but the parties were unable to resolve the issues. 

MOTION 

Pursuant to Federal Rule of Civil Procedure 12(b)(6), The Common Application (“TCA”) 

respectfully moves this Court to dismiss CollegeNET’s First Amended Complaint (“FAC”) in its 

entirety. In support of this motion, TCA relies upon its Memorandum of Law, the pleadings and 

documents on file, and such oral argument and other matters that the Court may consider. 

MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS 

FIRST AMENDED COMPLAINT 

I. INTRODUCTION 

Stripped of its long-winded rhetoric, CollegeNET’s FAC confirms that it seeks to turn the 

clock back to 1975, (FAC ¶ 144), and make it harder for students to submit, and colleges to 

process, applications – all so CollegeNET can compete with less effort. The FAC alleges that 

TCA, a non-profit association of non-profit colleges and universities, benefits both students and 

colleges by standardizing some aspects of the application process, thereby allowing more 

students to apply to more colleges more easily. That admitted stimulation of competition and 

expansion of output is antitrust’s ultimate goal, and belies CollegeNET’s assertion that TCA has 

somehow behaved anticompetitively, or that CollegeNET has suffered an antitrust injury because 

it would prefer to charge higher prices than colleges are willing to pay. See id. ¶¶ 150-51. 

Not surprisingly given that backdrop, CollegeNET pleads itself out of court as a matter of 

fundamental antitrust law. Not only does the FAC fail to allege any facts suggesting an adverse 

effect on prices (higher) or output (lower) – by itself making CollegeNET’s claims unique in the 

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history of antitrust cases – it alleges the opposite. CollegeNET expressly alleges that, since the 

advent of the supposed competitive restraints it challenges, prices have fallen and output risen. 

The “Challenged Restraints” (id. ¶ 15), “enable members to spend below-competitive levels on 

Online College Application Processing services without losing applicants” and “secure a boost in 

members’ applications.” Id. ¶ 157(a) & (c).1 Those twin hallmarks of robust competition prove 

that TCA’s innovative service is pro-consumer and pro-competitive as a matter of law – more 

colleges choose to accept, and more students to use, the Common Application. CollegeNET’s 

plea for protection from competition is antithetical to the antitrust laws it purports to invoke, and 

should be dismissed. See, e.g., Expedite, Inc. v. Plus, Bags, Cars & Serv., LLC, 2011 WL 

6399460, at *5 (D. Or.), report and recommendation adopted, 2011 WL 6372320 (D. Or.) 

(Hernandez, J.) (dismissing monopolization claim without leave to amend where plaintiff did not 

allege that consumers suffer from a lack of services in the relevant market or that defendant’s 

actions caused the price of those services to increase); see also Am. Ad Mgmt., Inc. v. GTE Co. of 

Cal., 190 F.3d 1051, 1055 (9th Cir. 1999) (the antitrust laws exist for the protection of 

“competition, not competitors.”); Part IV.A, below. 

CollegeNET’s attempts to avoid that fundamental problem with its case make no 

economic sense, run into each other, and so fail as a matter of law. See William O. Gilley Enters. 

v. Atl. Richfield Co., 588 F.3d 659, 662 (9th Cir. 2009) (on Rule 12, an antitrust complaint must 

be economically plausible). At its heart, the FAC posits that a group of buyers (the member 

Colleges) conspired to reduce competition among their suppliers, and thus victimize themselves 

 

1

 As discussed below, it is important to note that, whatever CollegeNET means by prices 

“below competitive levels,” it does not and cannot allege that TCA’s prices are below cost, a 

prerequisite to a price-based antitrust claim. What CollegeNET really means is prices are below 

what it would prefer to charge – not an antitrust problem by any stretch. Parts IV.A, B.2, C.1, 

below. 

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through inferior products. That nonsensical theory’s linchpin is an economically and legally 

meaningless term, “Net Output,” that CollegeNET literally made up for this case. It is designed 

to turn more output into less, and transform lower prices into higher ones, based on 

CollegeNET’s subjective assessment that TCA’s services are really bad for the colleges and 

students that choose to use them. Indeed, CollegeNET’s so-called Net Output is inversely 

proportional to actual output, so the more of TCA’s services consumers use, the worse off they 

are. CollegeNET’s competitive alchemy fails. The antitrust laws do not allow disgruntled 

competitors to remake marketplace rules and subvert consumer choice, or to dictate what 

consumers should want, much less based on subjective and unenforceable criteria created from 

whole cloth and, apparently, designed solely to avoid Rule 12. See Brooke Grp. v. Brown & 

Williamson Tobacco Corp., 509 U.S. 209, 223 (1993); Part IV.B, below. 

CollegeNET’s attempt to turn procompetitive price and output effects into an antitrust 

case is enough to dismiss its complaint, but there is more. Its specific antitrust claims also fail 

independently as a matter of law. TCA’s supposed “exclusivity” requirement is nothing more 

than a modest (above-cost) discount that most of its members choose to forego, and that is 

renegotiated each year and terminable at will. It is both per se lawful discounting and not 

remotely exclusionary in any event. Part IV.C.1, below. CollegeNET’s “tying” claim is based 

on a fiction. Its own allegations confirm that TCA never offered the “basic data” CollegeNET 

claims is the source of the illicit tie; and even if consumers preferred that product to be offered 

separately, CollegeNET admits it would be “elementary” for competitors to do so, so TCA could 

have no market power. Part IV.C.2, below. CollegeNET’s “group boycott” claim is no such 

thing as a matter of law; CollegeNET admits TCA’s members are free to use competing 

applications, and many do. Part IV.C.3, below. Finally, CollegeNET’s complaint about 

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“uniformity” takes issue with the degree of standardization of the Common Application, a 

quibble that the antitrust laws do not reach. Part IV.C.4, below. In any case, these claims are 

self-defeating: “Net Output” – CollegeNET’s purported measure of competitive merit – would 

actually decrease in the but-for world as more colleges and students spent more time and money 

on differentiating their applications, which CollegeNET (erroneously) claims the Challenged 

Restraints prevent them from doing. 

The college application processing market is highly competitive, with falling prices and 

increasing output, and CollegeNET’s own allegations concede that TCA has stimulated, not 

harmed, that competition. CollegeNET’s revised effort to state a claim fails, and reveals that its 

litigation goals are fundamentally at odds with antitrust law . The FAC should be dismissed 

without leave to amend. 

II. FACTS 

The facts relevant to this motion, taken from the FAC and incorporated by reference, are 

set forth below. 

A. The Parties 

Established in 1975, TCA is a non-profit association, made up of 549 public and private 

non-profit member colleges, that provides a standardized college application form and related 

forms and processing services for use in the college application process. FAC ¶¶ 7, 38. Both 

Colleges and college applicants are consumers of application processing services, and providers 

like TCA and CollegeNET compete to serve both sets of consumers, among other things by 

offering “lower prices” and better services. Id. ¶¶ 25-27.2

 

 

2

 According to CollegeNET, “Colleges compete to attract applicants not only to ultimately 

secure high-value students but also because an increase in the number of applications received by 

a College increases the application fees it generates and lowers its admission rate, which raises 

its selectivity rating and its college ranking. This in turn allows the College to attract even more 

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As the college application process moved from paper to electronic submissions, TCA’s 

services evolved to meet market demand. In 1998, TCA launched an online application system 

that it offered in conjunction with paper applications. FAC ¶ 40. As electronic submission 

became more widespread, TCA expanded its product offerings. Currently, in addition to a 

standardized application form transmitted electronically to the member schools chosen by the 

applicant, TCA offers a number of related services to member colleges, including online 

processing services related to application forms, evaluations, transcripts, and application fees. 

Id. ¶¶ 40, 59-60 (“[I]n the mid-2000s, Common Application introduced several Common 

Application-branded supplement forms and its own Institutional Supplement and payment 

processing services (which it contracted with Sallie Mae to provide).”). TCA offers these 

services to colleges as a bundle with its Common Application. See id. ¶ 61. 

By using TCA, students “save[] the time of having to fill out the[ir] background 

information more than once” and can submit their application to “any of the network Colleges.” 

FAC ¶¶ 22, 38. Students can also “request evaluations from within the Common App online 

system,” (id. ¶ 60), submit application fee payments, (id. ¶ 20(e)), and check submission status 

online. Id. ¶ 20(c). For Colleges, TCA provides a portal for “the sometimes extensive reconfiguration of the submitted information in a way that allows the College to make use of it in 

reviewing applicants, e.g., online review portals, flexible download engines, and export 

services.” Id. ¶ 20(c). Thus, according to CollegeNET, TCA has led more students to apply to 

more colleges. Id. ¶ 50. “In 2014-15, an estimated 9.4 million undergraduate applications will 

be submitted, with 5-6 million processed online by third-party providers,” including TCA. Id.

¶ 115. In aggregate, from 2001-12, the number of applications submitted through TCA nearly 

 

(and higher-value) applicants, greater alumni donations, and better professors, increases the 

College’s creditworthiness, and lowers its borrowing costs.” Id. ¶ 31. 

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quadrupled, to some three million. Request Seeking Judicial Consideration of Documents 

Incorporated by Reference (“RJC”), Ex. 1, at 1-2. CollegeNET alleges that TCA members 

receive a 20-40% increase in application volume. FAC ¶ 113. 

Membership in TCA has grown from the original 15 colleges to approximately 549 out of 

1,500 U.S. Colleges, as CollegeNET defines them. FAC ¶¶ 7, 38. Almost two-thirds of TCA’s 

members are Non-Exclusive, and may use one or more other admission applications, including 

their own. RJC, Ex. 1, at 1 (one-third of the 500 members in 2012 were exclusive).3 TCA 

competes with CollegeNET, AOL, XAP, Hobsons and AY to provide online application 

processing services. FAC ¶ 93. 

CollegeNET is a for-profit company providing “web-based on-demand technologies to 

institutions of higher education and non-profits.” FAC ¶ 35. It offers “a suite of web-based 

administrative services, including customized online application forms and processing services 

and contact management services, to higher education and non-profit organizations.” Id. ¶ 6. 

B. Alleged Competitive Effects Of TCA’s Challenged Conduct 

CollegeNET alleges TCA has imposed various “restraints” on competition in a laundry 

list of alleged “relevant markets” and submarkets, resulting in a variety of purported antitrust 

violations. See FAC ¶¶ 15, 90, 149-162. The alleged restraints are discussed further in Part 

IV.C, below, but common to all of them is the dual allegation that TCA’s challenged conduct has 

resulted in lower prices for, and greater output of, college applications and related processing 

 

3

 Exclusive Members agree to use the Common Application as their only admission 

application. FAC ¶¶ 76-77. The agreements with Exclusive II Members include additional 

terms pertaining to fees, deadlines, Early Decision requirements, and various application 

supplements. Id. ¶ 77. Fees for TCA services vary depending on the level of membership, with 

larger discounts available to Exclusive II Members. Id. ¶¶ 76-78. CollegeNET does not allege 

that TCA’s pricing is predatory (below-cost), or that it could not offer similar or lower pricing to 

colleges if it chose to. See id. ¶ 151. To the contrary, CollegeNET alleges its prices are “lower” 

than TCA’s. Id.¶ 152. 

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services. Id. ¶ 157(a) (challenged “restraints enable members to spend below-competitive levels 

on Online College Application Processing services without losing applicants”); id. ¶ 157(c) 

(more students are applying to more colleges using TCA, resulting in “a boost in members’ 

applications”); see also id. ¶ 50 (percentage of students applying to 3 or more or 7 or more 

colleges between 2010 and 2011 more than doubled the percentage of such students one decade 

prior); id. ¶ 137 (TCA is “gaining[] applicant users”); id. ¶ 151 (TCA’s “equal treatment” 

requirement has “lower[ed] prevailing prices for” Online College Application Processing 

services).4 

After TCA pointed out the fatal problem with CollegeNET’s allegations of increased 

output in its prior motion to dismiss, CollegeNET came up with a new idea. It now alleges: 

“Net Output” is the net value derived from Online College Application Processing 

services by both Colleges and applicants. Net Output increases as the quality, 

functionality, features, ease of use, and level of innovativeness of Online College 

Application Processing services improve. Net Output also increases as those 

services better enable Colleges to discover and matriculate students who are good 

matches for their College, applicants to discover and matriculate at Colleges that 

are good matches for them, and Colleges to predict yield (how many accepted 

applicants will matriculate). Net Output decreases as the amount of resources 

(e.g., money and time) expended by Colleges and applicants in connection with 

using Online College Application Processing services in the college admissions 

process increases. 

FAC ¶ 21. 

According to CollegeNET: 

Net Output from Online College Application Processing services is not measured 

in the number of applications processed because it does not account for the costs 

of submitting, processing, and reviewing such applications (in dollars and time). 

As applicants submit a greater number of applications, they pay more application 

 

4

 CollegeNET admits that TCA’s prices, even for Non-Exclusive members and unadjusted 

for inflation, were lower after TCA imposed its alleged anticompetitive restraints. See, e.g., FAC 

¶¶ 59, 61 (comparing prices before and after alleged restraints). For exclusive members, prices 

fell even more, though were still above cost and pro-competitive as a matter of law. See id.; Part 

IV.C.1, below. 

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fees, spend more time preparing applications, and receive a greater number of 

rejections. Furthermore, a greater number of applications processed bears no 

relationship to the ability of Colleges and applicants to discover good matches or 

Colleges to predict their yield. 

FAC ¶ 32. Thus, by definition, as actual output (the number of applications submitted and 

processed) increases, Net Output decreases: Magic. 

III. LEGAL STANDARD 

A. Rule 12 

To withstand a motion to dismiss for failure to state a claim, a plaintiff must plead 

“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 570 (2007); Witt Co. v. Riso, Inc., 948 F. Supp. 2d 1227, 1234 (D. Or. 2013). 

Allegations of material fact are taken as true, and reasonable inferences drawn in plaintiff’s 

favor, but “conclusory allegations of law and unwarranted inferences are insufficient to defeat a 

motion to dismiss for failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 

(9th Cir. 1996); Tanaka v. Univ. of S. Cal., 252 F.3d 1059, 1063 (9th Cir. 2001) (“conclusory 

assertion” insufficient to support a relevant antitrust market). “[A] plaintiff’s obligation to 

provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a 

formulaic recitation of a cause of action’s elements will not do.” Twombly, 550 U.S. at 555 

(internal quotations omitted). The Court may disregard internally inconsistent factual 

allegations. See Tanaka, 252 F.3d at 1063 (disregarding conclusion about the relevant market 

contradicted by factual allegation); Apple, Inc. v. Psystar Corp., 586 F. Supp. 2d 1190, 1200 

(N.D. Cal. 2008) (finding no proper relevant market alleged where allegations were “internally 

contradictory”). 

“The court need not . . . accept as true allegations that contradict matters properly subject 

to judicial notice or” incorporated by reference into the FAC. See, e.g., Sprewell v. Golden State 

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Warriors, 266 F.3d 979, 988 (9th Cir. 2001), amended on other grounds, 275 F.3d 1187 (9th Cir. 

2001); Yang v. Dar Al-Handash Consultants, 250 F. App’x 771, 772 (9th Cir. 2007) (holding 

that a district court need not “blindly accept the allegations in the pleadings as true if these 

allegations are contradicted by uncontested facts set forth in (1) exhibits to the non-moving 

party’s pleading, (2) documents that are referred to in the non-moving party’s pleading, or (3) 

facts that are included in materials that can be judicially noticed.”).5 The policy underlying these 

rules is to prevent plaintiffs from insulating complaints against motions to dismiss by artful 

pleading. See, e.g., Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (judicial notice 

rules aimed at “[p]reventing plaintiffs from surviving a Rule 12(b)(6) motion by deliberately 

omitting references to documents upon which their claims are based”), superseded by statute on 

other grounds as stated in Abrego Abrego v. Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006). 

“[A] court must determine whether an antitrust claim is ‘plausible’ in light of basic 

economic principles” and common sense. William O. Gilley, 588 F.3d at 662. Courts are 

particularly wary of conclusory or insufficient allegations in antitrust claims, because of the 

potential for needless and extremely burdensome discovery. “[A] district court must retain the 

power to insist upon some specificity in pleading before allowing a potentially massive factual 

controversy to proceed,” particularly in light of the fact that “antitrust discovery can be 

expensive.” Twombly, 550 U.S. at 558 (citation omitted). 

B. Foundational Antitrust Principles 

CollegeNET’s FAC turns antitrust fundamentals upside down by complaining that TCA’s 

allegedly improper policies produced lower prices and increased output, which are the hallmarks 

 

5

 TCA’s accompanying Request Seeking Judicial Consideration of Documents 

Incorporated by Reference discusses material cited and relied on in the FAC that the Court may 

consider on this motion. 

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of procompetitive practices. CollegeNET confuses the “harm” produced by robust competition 

(in which CollegeNET falls short) with the kind of real, actionable harm to the market actually 

produced by antitrust violations. In the process, CollegeNET ignores fundamental, indisputable 

goals of antitrust law: markets should respect consumer preference; the antitrust laws serve to 

protect competition, not competitors; and business conduct that decreases price and increases 

output, as does the conduct challenged here, is invariably procompetitive. Each is summarized 

below. 

1. Consumer Welfare Is the Touchstone of Antitrust Law

At its core, “[a]ntitrust is about the effect of business behavior on consumers.” Robert H. 

Bork, The Antitrust Paradox (“Bork”), 51 (1978) (emphasis added). “Congress designed the 

Sherman Act as a consumer welfare prescription.” NCAA v. Bd. of Regents of Univ. of Okla.,

468 U.S. 85, 107 (1984) (internal citation omitted); see also Cal. ex rel. Harris v. Safeway, Inc., 

651 F.3d 1118, 1132 (9th Cir. 2011). In fact, “[t]he only legitimate goal of American antitrust 

law is the maximization of consumer welfare,” Bork at 90, which the Ninth Circuit recognizes as 

the “touchstone” of antitrust law. See Safeway, Inc., 651 F.3d at 1132. 

Vigorous competition enhances consumer welfare and effectuates consumer preference. 

“A competitive market system is preferred largely because of the widely held belief that 

competition promotes consumer welfare.” Hirsh v. Martindale-Hubbell, Inc., 674 F.2d 1343, 

1348 (9th Cir. 1982). “[C]onsumers are almost invariably best served by low prices, low costs, 

innovation, and hard competition generally – all outcomes that are completely consistent with an 

exclusively economic approach to antitrust law.” Phillip E. Areeda and Herbert Hovenkamp, 

Antitrust Law, ¶ 111c at 109 (4th ed. 2013). See also Reudy v. Clear Channel Outdoors, Inc., 

693 F. Supp. 2d 1091, 1128 (N.D. Cal. 2010) (“[C]onsumers are presently actually better off 

because the acts . . . neither reduce output nor raise prices, [and] appear to be pro-competitive.”), 

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aff’d sub nom. Reudy v. CBS Corp., 430 F. App’x 568 (9th Cir. 2011). 

CollegeNET re-writes this antitrust law precept by suggesting that consumer preference 

should be disregarded or overruled because, it suggests, consumers do not know what they 

should want or what is best for them. However, “[c]laims of excessive competition are 

especially suspect when they accuse the consumers of misunderstanding their own interests.” 

Stamatakis Indus. v. King, 965 F.2d 469, 471 (7th Cir. 1992). “[A]ntitrust law is not the 

appropriate vehicle” to make “social judgments” and “should accept marketplace decisions as the 

expression of consumer preference.” Phillip Areeda and Donald F. Turner, Predatory Pricing 

and Related Practices under Section 2 of the Sherman Act, 88 Harv. L. Rev. 697, 731 (1975) 

(“Areeda & Turner”). When a competitor like CollegeNET claims a defendant violates the 

antitrust laws by implementing a “lower quality” standard, which results in greater sales of lower 

priced products, the claim is actually “directed toward lessening competition” because the 

competitor “seeks to avoid the fetters of price competition by claiming that consumers are 

injured when they choose inferior [products] because of the price.” ECOS Elecs. Corp. v. 

Underwriters Labs., 743 F.2d 498, 502 (7th Cir. 1984). 

2. Antitrust Laws Protect Competition, not Competitors

It is well-settled that the antitrust laws exist for the protection of “competition, not 

competitors.” Am. Ad Mgmt., 190 F.3d at 1055. In fact, “the antitrust laws are only intended to 

preserve competition for the benefit of consumers,” even at the expense of competitors. Id.; see 

also Bork at 66 (“The legislative histories of the antitrust statutes . . . do not support any claim 

that Congress intended the courts to sacrifice consumer welfare to any other goal.”). 

It is an antitrust truism that “[n]ot all conduct injuring rivals is anticompetitive.” Phillip 

E. Areeda and Herbert Hovenkamp, Antitrust Law, ¶ 651d at 116 (3d ed. 2008) (“Areeda & 

Hovenkamp”) (identifying conduct that increases output and conduct that decreases price as 

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procompetitive conduct that can nonetheless injure rivals); see also Rebel Oil Co. v. Atl. 

Richfield Co., 51 F.3d 1421, 1433 (9th Cir. 1995) (even conduct that eliminates competitors does 

not invoke the Sherman Act unless it harms consumer welfare); Triple M Roofing Corp. v. 

Tremco., Inc., 753 F.2d 242, 243 (2d Cir. 1985) (“The antitrust laws were never intended to 

provide a balm for the hardships occasioned by vigorous competition.”). On the contrary, 

“‘injuries to rivals are byproducts of vigorous competition’ of the kind and quality that antitrust 

laws seek to nurture.” Expedite, 2011 WL 6399460, at *5 (citations omitted); accord Rebel Oil, 

51 F.3d at 1433. 

3. Consumer Welfare Is Enhanced, not Injured, by Practices that 

Maximize Output and Minimize Price 

Antitrust law “seeks to protect the process of competition on the merits and the economic 

results associated with workable competition.” Areeda & Hovenkamp, ¶ 651d at 117. 

Accordingly, “the Sherman Act[] command[s] that price and supply be responsive to consumer 

preference.” Bd. of Regents, 468 U.S. at 110. An adverse effect on competition is signified by a 

reduction of output or an increase in price. See Pool Water Prods. v. Olin Corp., 258 F.3d 1024, 

1034 (9th Cir. 2001) (citing Nelson v. Monroe Reg’l Med. Ctr., 925 F.2d 1555, 1564 (7th Cir. 

1991) (“Antitrust injury ‘means injury from higher prices or lower output, the principal vices 

proscribed by the antitrust laws.’”). On the other hand, lower prices and higher output are not 

actionable – they are “the economic results associated with workable competition.” Areeda & 

Hovenkamp, ¶ 651d at 117. 

“The antitrust injury doctrine requires every plaintiff shows that its loss comes from acts 

that reduce output or raise prices to consumers.” Stamatakis Indus., 965 F.2d at 471 (internal 

citations and quotation marks omitted). If the plaintiff’s alleged injury flows from conduct that 

is neutral or beneficial to competition, it is not actionable. See Pool Water Prods., 258 F.3d at 

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1034 (citing Rebel Oil, 51 F.3d at 1433). Alleged injuries “which result from increased 

competition or lower (but non-predatory) prices are not encompassed by the antitrust laws.” Am. 

Ad Mgmt., 190 F.3d at 1057 (emphasis in original). “Conduct that reduces the defendant’s costs 

typically injures rivals . . . [and] virtually always benefits consumers,” (Areeda & Hovenkamp, 

¶ 651d1 at 118), which is why establishing “competitive injury resulting from a rival’s low 

prices” requires a plaintiff to “prove that the prices complained of are below an appropriate 

measure of its rival’s costs.” Brooke Grp., 509 U.S. at 222-23. Because “low prices benefit 

consumers regardless of how those prices are set, and so long as they are above predatory levels, 

they do not threaten competition”; this principle applies “regardless of the type of antitrust claim 

involved.” Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 340 (1990); see also 

Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312, 319 (2007) (Supreme 

Court “particularly wary of allowing recovery for above-cost price cutting because allowing such 

claims could, perversely, chill[] legitimate price cutting, which directly benefits consumers” 

(internal quotation omitted)). 

Similarly, conduct that increases output is encouraged and protected, not prohibited, by 

antitrust laws. See Pool Water Prods., 258 F.3d at 1034; Broad. Music, Inc. v. Columbia Broad. 

Sys., Inc. (“BMI”), 441 U.S. 1, 19-20 (1979) (antitrust laws concerned with conduct that 

“restrict[s] competition and decrease[s] output”) (citations omitted); Omega Envtl., Inc. v. 

Gilbarco, Inc., 127 F.3d 1157, 1164 (9th Cir. 1997) (not reasonable to infer “injury to 

competition” when evidence shows “increasing output [and] decreasing prices”). “Consumers 

are generally benefitted by higher output, which is nearly always accompanied by lower prices. 

... Since output increases are presumably in the best interest of consumers as well, a court must 

be wary of condemning above-cost, output-increasing conduct.” Areeda & Hovenkamp, ¶ 651d2 

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at 118.6 

While disgruntled competitors like CollegeNET do not like it when their rivals increase 

output and decrease price, consumers benefit enormously. No antitrust action should go forward 

where, as here, it targets conduct by a rival that reduces price and increases output. 

IV. THE FAC SHOULD BE DISMISSED FOR FAILURE TO STATE A CLAIM 

CollegeNET is misusing this litigation to shield itself from increased competition and its 

own competitive shortcomings, to the detriment of the consumers antitrust law is designed to 

protect. “Antitrust law should not impose sanctions for the very conduct [i.e., robust 

competition] it would encourage.” Areeda & Hovenkamp, ¶ 651d at 117. “Behavior that is no 

more restrictive of rivals’ opportunities than is reasonably necessary to effect competition on the 

merits is and should be approved by Sherman Act §2. Such behavior is, after all, indispensable if 

the antitrust laws are to achieve their objective.” Id.. 

A. CollegeNET Admits Lower Prices And Higher Output, So It Cannot Allege 

Harm To Competition As A Matter of Law 

CollegeNET repeatedly acknowledges that TCA’s Challenged Restraints have reduced, 

not increased, prices. Part II.B, above. “[A] plaintiff seeking to establish competitive injury 

resulting from a rival’s low prices must prove that the prices complained of are below an 

appropriate measure of its rival’s costs.” Brooke Grp., 509 U.S. at 222-23. CollegeNET does 

not allege below-cost pricing, but instead alleges that TCA has lowered prices “below 

competitive levels.” See FAC ¶ 151. Whatever that carefully phrased allegation means, it fails 

as a matter of antitrust law because low, non-predatory prices benefit consumers, and are not 

actionable, no matter how they are set. See Atl. Richfield, 495 U.S. at 340. CollegeNET’s 

 

6

 The only potential exceptions are where increased output is not marketwide, or where 

defendant is engaged in predatory pricing, neither of which is, or could be, alleged here. See Part 

II.B, above; Part IV.A, below. 

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allegations that TCA’s low prices make it harder for CollegeNET to compete are irrelevant and 

contrary to basic antitrust principles. See id.; Am. Ad Mgmt., 190 F.3d at 1057. 

CollegeNET also alleges that the Challenged Restraints have resulted in “a boost in 

members’ applications,” as more students are applying to more colleges using TCA. FAC 

¶ 157(c); see also Part II.B, above. According to the FAC, “between 2010 and 2011, the 

percentage of students applying to at least three Colleges rose from 77% to 79% (more than 10% 

more than in 2000)” and the percentage of students applying to at least seven Colleges rose from 

25% to 29% (both of which are more than double the percentage of such students a decade 

earlier).” FAC ¶ 50. The FAC concedes that the growth in output of online applications, and 

thus Online Application Processing Services, during the period of the Challenged Restraints has 

been “stunning”: 

Id. ¶ 82, Fig. 1. In addition, that greater output is both “a product” of enhanced competition 

among colleges in the “market for student applications,” as CollegeNET admits, and itself 

enhances competition in the alleged College Admissions Market. See Plaintiff CollegeNET, 

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Inc.’s Response in Opposition to Defendant’s Motion to Dismiss, Docket 59, at 30 n.19. An 

increase in the number of submitted applications leads to greater (direct) competition among 

colleges for students that have applied.7 

Having alleged that TCA’s conduct furthers the two primary goals of antitrust law, 

CollegeNET has pled itself out of court. See BMI, 441 U.S. at 19-20; Omega Envtl., 127 F.3d at 

1164; Pool Water Prods., 258 F.3d at 1034. Similarly, CollegeNET has failed to allege that it 

suffered antitrust injury, or injury “of the type the antitrust laws were intended to prevent,” an 

independent requirement for a private antitrust plaintiff. Am. Ad Mgmt., 190 F.3d at 1057; see 

also Reudy, 693 F. Supp. 2d at 1128 n.35 (“[T]his is not an antitrust injury because this alleged 

harm has not decreased output nor raised prices.”). “The Supreme Court has made clear that 

injuries which result from increased competition or lower (but non-predatory) prices are not 

encompassed by the antitrust laws.” Am. Ad Mgmt., 190 F.3d at 1057.

The FAC’s allegations describe a market in which the Challenged Restraints have 

lowered prices and increased output. Those allegations are a textbook-quality example of market 

forces in operation. They are not the basis for an antirust claim as a matter of law. See Expedite, 

2011 WL 6399460, at *5 (“Alleging the natural consequences of competition is insufficient to 

state a claim under Section 2 of the Sherman Act.”). 

 

7

 As CollegeNET has previously argued, “a student’s submission of her application to a 

given school is a product of . . . competition” among colleges to recruit students. Id. It is 

equally true that a student’s application initiates a second level of competition among colleges to 

which she has applied. In any event, CollegeNET does not and cannot allege any facts showing 

that the Challenged Restraints have had any anticompetitive effect on price or output in the 

Admissions Markets for “College degree programs.” See id.; FAC ¶¶ 149-62; Pool Water 

Prods., 258 F.3d at 1034. 

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B. The Two Cornerstones Of CollegeNET’s FAC Do Not Make Economic 

Sense And Fail To Salvage Its Case 

CollegeNET’s response to that fundamental problem with its case is to step through the 

looking glass. It claims the lower prices and greater output that it concedes resulted from the 

Challenged Restraints are really just the opposite, and thus evidence of anticompetitive injury. 

That remarkable position rests entirely on CollegeNET’s newly minted theory of “Net Output,” 

which posits that consumers’ decisions to use more of TCA’s services are socially wasteful or a 

poor use of time, and thus come at a higher (“net”) cost. CollegeNET’s theory of social merit, 

even if it were true (it isn’t), is found in no antitrust authority, anywhere, and contradicts basic 

notions of competitive markets. It is like claiming that competitor collaborations that allow 

streaming of televised content to mobile devices, or that lower the price of soft drink bottles, are 

“bad” for consumers because people should watch less TV and drink less soda. CollegeNET’s 

“Net Output” invention is unsupported, arbitrary, and self-defeating as a matter of basic antitrust 

law. Part IV.B.1, below. Its attempt to turn low prices into an antitrust violation by invoking a 

“buyers’ cartel” theory also fails as a matter of law and common sense. Part IV.B.2, below. 

1. CollegeNET’s Fabricated Concept of “Net Output” Is an Antitrust 

Non-Starter 

Unable to deny the procompetitive “boost” to output caused by the Challenged Restraints 

(FAC ¶¶ 50, 157(c)), CollegeNET hangs its case on an alternate reality where greater output is 

really less, because “Net Output” is what counts. Id. ¶¶ 21, 32. This device, not supported by 

any antitrust authority and seemingly created to avoid Rule 12 in this case, fails as a matter of 

law. First, output measures just what its name suggests: the goods and services that markets 

produce. In this case, allegedly involving Online Application Processing Services, the admitted 

greater consumption of those services by Colleges and students equates to more output, produced 

as a result of the Challenged Restraints. “Net Output,” which is expressly “not measured in the 

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number of applications processed,” (FAC ¶ 32), is legally irrelevant and cannot sustain an 

antitrust claim. See, e.g., Tanaka, 252 F.3d at 1064 (affirming dismissal without leave to amend; 

disregarding allegation of plaintiff’s personal preferences as “irrelevant to the antitrust inquiry” 

regarding relevant market).

CollegeNET goes on to prove that is true. By its definition, Net Output is inversely

proportional to the actual increasing output alleged in the FAC. According to CollegeNET, “[a]s 

applicants submit a greater number of applications” – i.e., actual output increases – Net Output 

decreases because applicants “pay more application fees, spend more time preparing 

applications, and receive a greater number of rejections.” FAC ¶ 32. Similarly, in 

CollegeNET’s view, colleges do not benefit from “a greater number of applications” because 

they have to spend more time reviewing them and there is a reduction in “their ability to find a 

good match or predict yield.” See id. ¶¶ 32, 157.8

 Thus, Net Output literally turns antitrust law 

and economics upside down. “[A]n antitrust claim [must be] ‘plausible’ in light of basic 

economic principles” and make economic sense. William O. Gilley, 588 F.3d at 662. 

CollegeNET’s Net Output-based complaint fails this threshold test.9 

CollegeNET’s subjective opinions about applicants applying to too many colleges (i.e., 

an increase in output), the supposed inferiority of TCA’s service, and the purported limitations 

 

8

 CollegeNET’s legally insufficient allegations are also misleading. Submitting and 

reviewing more applications might “cost” more time and money in aggregate (just like buying 

two more widgets costs more than buying one), but CollegeNET is suspiciously silent on the per 

application cost. Elsewhere it admits, as it must, that those costs, in both time and money, have 

fallen. Part IV.A, above. 

9

 CollegeNET’s attempt to equate the technical difficulties experienced by CA4 with a 

reduction in either output or “Net Output” (FAC, ¶¶68-72) also fails. “Just as a temporary 

decline in the number of competitors is not a significant restraint of trade, neither is a related 

temporary decline in quantity, quality, or efficiency.” Adaptive Power Solutions, LLC v. Hughes 

Missile Sys. Co., 141 F.3d 947, 952 (9th Cir. 1998). 

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on colleges’ ability to market themselves “while gaining[] applicant users” (FAC ¶ 137), do not 

allow CollegeNET to use “Net Output” to substitute its own social judgment about what 

consumers should value over actual consumer preference revealed through actual market 

outcomes. See Stamatakis, 965 F.2d at 471; ECOS Elecs. Corp., 743 F.2d at 502 (rejecting claim 

that “seeks to avoid the fetters of price competition by claiming that consumers are injured when 

they choose inferior [products] because of the price”). “Although legislation can explicitly 

substitute a social judgment for that of the marketplace, antitrust law is not the appropriate 

vehicle for such a substitution and should accept marketplace decisions as the expression of 

consumer preference.” Areeda & Turner at 371; see also United States v. Phila. Nat’l Bank, 374 

U.S. 321, 371 (1963) (stating that effect on competition, not an evaluation of social factors or a 

“value choice,” determines whether a merger violates antitrust laws). CollegeNET’s suggestion 

that the procompetitive price and output effects of TCA’s conduct should be devalued based on a 

competitor’s subjective opinion about the socially optimal level of output “is beyond the 

practical ability of a judicial tribunal to control without courting intolerable risk[] of chilling 

legitimate price cutting.” Brooke Grp., 509 U.S. at 223. 

Ultimately, CollegeNET’s nonsensical “Net Output” theory not only violates basic 

economic principles and antitrust law, it is also self-defeating. Even accepting it for argument’s 

sake as the appropriate measure of output, there would be no injury to competition as a result of 

the Challenged Restraints. Competitive injury analysis compares price and output in the actual 

world to a “but-for” world free of the challenged conduct. See Reudy, 693 F. Supp. 2d at 1128; 

Blades v. Monsanto Co., 400 F.3d 562, 569 (8th Cir. 2005) (“To establish antitrust impact, an 

expert is required to construct a hypothetical market, a but-for market, free of the restraints and 

conduct alleged to be anticompetitive.”). According to CollegeNET, however, “Net Output 

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decreases as the amount of resources (e.g., money and time) expended by Colleges and 

applicants in connection with using Online College Application Processing services in the 

college admissions process increases.” FAC ¶ 21. Thus, for students, Net Output would 

decrease in the but-for world absent TCA’s “uniformity requirements” as they spent more time 

“showcas[ing] themselves,” “upload[ing] documents,” and otherwise “customiz[ing] their 

applications to different Colleges.” Id. ¶ 155. Likewise, for Colleges, Net Output would 

decrease in the absence of the “equal treatment” requirement, as they spent more time and money 

investing in institution-specific applications “as a marketing tool to differentiate themselves” and 

“first-class technology” to divert applicants from competing schools. Id. ¶¶ 150, 165. 

CollegeNET’s Net Output invention thus defeats itself. See Reudy, 693 F. Supp. 2d at 1128 

(allegations of competitive injury insufficient because the alleged acts, though illegal, “result in 

an increased supply and lower pricing, . . . [and] eliminating [them] from the market place will 

actually restrict competition and cause prices to rise”). 

2. CollegeNET Cannot Allege TCA’s Lower Prices Are Anticompetitive 

Because Its Buyers’ Cartel Claim Is Unsupported as a Matter of Law 

CollegeNET also tries to conjure an antitrust claim out of TCA’s lower prices by 

suggesting TCA’s members engaged in a “buyers’ cartel.”10 FAC ¶ 172 (alleging that the TCA 

 

10 The object of a buyers’ cartel is to “force the prices that suppliers charge the members of 

the cartel below the competitive level.” Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 

697, 705 (7th Cir. 2011) (citation and internal quotation marks omitted). Because 

procompetitive joint purchasing and a buyers’ cartel can look very similar, the key to a buyers’ 

cartel claim is a reduction in demand: “the former is an output-increasing activity while the latter 

reduces output.” Areeda & Hovenkamp, ¶ 2012b, at 139. Thus, one can distinguish a buyers’ 

cartel from joint purchasing “by examining whether the participants sought to limit collective 

purchases or to expand them.” Areeda & Hovenkamp, ¶ 2010 at 128. See also Weyerhaeuser, 

549 U.S. at 320-21 (to exercise monopsony power, a monopsonist “will seek to restrict its input 

purchases below the competitive level, thus reducing the unit price for the remaining inputs it 

purchases”) (internal quotation marks and citation omitted); Campfield v. State Farm Mut. Auto. 

Ins. Co., 532 F.3d 1111, 1118 (10th Cir. 2008) (“In a monopsony, the buyers have market power 

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members, the buyers of Online College Application Processing services, conspired to ensure 

“prices paid for such services [are] below competitive levels”). CollegeNET does not allege an 

explicit buyers’ cartel.11 Although CollegeNET claims it was paid “below-competitive prices” 

for its services, (id. ¶ 151), there is no allegation that TCA member colleges actually agreed to 

fix prices paid to CollegeNET. Rather, CollegeNET suggests that through TCA’s “equal 

treatment” requirement, member colleges have somehow “reduced competition” and 

“suppress[ed] demand for Online College Application Processing services, thus lowering 

prevailing prices for such services below competitive levels” and demanded “below-competitive 

prices” for CollegeNET’s services. Id. ¶¶ 150-51. CollegeNET’s allegations in support of that 

conclusory claim are schizophrenic and legally insufficient. 

First, CollegeNET claims TCA members refused to deal with CollegeNET, but 

simultaneously claims some have “contracted with CollegeNET.” See FAC ¶¶ 151-52. Second, 

CollegeNET alleges TCA’s prices are “below competitive levels” (but not below cost) and that 

TCA members therefore demand prices from CollegeNET that are too low, but also claims its 

prices are “lower[]” than TCA’s. Id. ¶ 151-52. Third, CollegeNET contradicts its allegation that 

 

to decrease market demand for a product and thereby lower prices” below a competitive level 

and reduce output.). 

11 CollegeNET has apparently abandoned the nonsensical theory that TCA conspired to 

reduce its own selling prices, but attempts to save the claim by now alleging that the member 

colleges have conspired with TCA to suppress the prices CollegeNET can charge and refused to 

deal with CollegeNET. See FAC ¶ 172. Implicit in this iteration of the theory is that the 

member colleges conspired to suppress their own competitive options by excluding a supplier. 

“Why would [a college] want to injure itself in this way? A theory of liability attributing 

irrationality to consumers does not get very far.” Stamatakis Indus., 965 F.2d at 471-72; Oil 

Exp. Nat., Inc. v. D’Alessandro, 1998 WL 214727, at *4 (N.D. Ill.) (dismissing group boycott 

claim and rejecting theory that “a group of consumers in the [relevant] market have banded 

together to drive [plaintiff], a supplier to that market, out of business” because with “fewer 

suppliers, there would be less competition among suppliers in terms of pricing, and the 

consumers themselves ... would suffer the antitrust injury”). 

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TCA members “have demanded below-competitive amounts of” Online College Application 

Processing services because it admits that they pay lower prices to TCA “without losing 

applicants” and output is increasing. See id. ¶¶ 151, 157(a). The Court need not credit 

CollegeNET’s self-contradictory allegations. See Tanaka, 252 F.3d at 1063. 

Regardless, CollegeNET confuses reduced demand for its services with a marketwide 

reduction in demand. A buyers’ cartel claim is based on “depress[ed] demand” in the market 

overall. See Campfield, 532 F.3d at 1118. CollegeNET cannot and does not claim that 

marketwide demand has decreased; it alleges just the opposite. See FAC ¶ 50; Part II.B, above. 

Increased output is the result of marketwide demand for processing services increasing, not being 

suppressed. 

CollegeNET’s real complaint is that because it saw a reduction in demand for its services, 

it was forced to lower its prices to compete. Again, CollegeNET does not allege TCA’s prices 

were below cost, or even lower than CollegeNET could offer if it chose to. Even if TCA’s prices 

were “below competitive levels,” CollegeNET would have no claim. “[N]onpredatory price 

competition for increased market share, as reflected by prices that are below ‘market price’ . . . 

‘is not activity forbidden by the antitrust laws.’” Atl. Richfield, 495 U.S. at 340 (citation 

omitted). Indeed, “[a] firm complaining about the harm it suffers from nonpredatory price 

competition ‘is really claiming that it [is] unable to raise prices.’” Id. at 337-38 (alteration in 

original) (citation omitted). Such an “attempt to use the antitrust laws as a means of stifling price

competition” is “nothing less than a frontal assault on the basic policy of the Sherman Act,” and 

thus “antithetical to the goals of the Sherman Act.” ECOS Elecs. Corp., 743 F.2d at 502 

(quoting Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 695 (1978)). “It would be 

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ironic indeed if the standards” for establishing antitrust injury “were so low that antitrust suits 

themselves became a tool for keeping prices high.” Brooke Grp., 509 U.S. at 226-27. 

Sewell Plastics, Inc. v. Coca-Cola Co., 720 F. Supp. 1196 (W.D.N.C. 1989),12 is directly 

on point. Plaintiff, a manufacturer of plastic soft drink bottles, brought antitrust claims against 

soft drink bottlers and Southeastern Container, a joint venture owned by the bottlers that also 

made bottles. Id. at 1198. The court noted that since the “formation of Southeastern . . . , plastic 

bottle prices have decreased, [and] output of plastic bottles has increased. . . .” Id. at 1218. 

Regarding harm to competition, the best plaintiff could show was that “Southeastern has at times 

experienced quality problems with its bottles and that certain companies have decreased research 

and development expenditures.” Id. The court held that Sewell could not establish antitrust 

injury because “consumers of plastic bottles . . . have benefitted from decreased, nonpredatory 

prices” and to “allow Sewell to recover treble damages for lost sales to the Bottlers would be to 

allow a windfall.” Id. at 1222. The facts in Sewell match CollegeNET’s allegations: since 

TCA’s formation, prices have decreased (see e.g., FAC ¶¶ 59, 61, 151, 157(a)); output has 

increased (see e.g., id. ¶¶ 50, 82, 137, 157(c)); and, at best, CollegeNET has alleged that TCA 

suffered temporary quality problems. See id. ¶¶ 68-69. Thus, CollegeNET’s alleged facts are 

insufficient to establish antitrust injury as a matter of law. 

CollegeNET’s case rests fundamentally on a complaint that consumers prefer TCA. 

While the market benefitted from lower prices and greater output, CollegeNET found it difficult 

to compete. That is competition, not an antitrust violation, and CollegeNET’s inversion of the 

law and economics does not change it. The antitrust laws are designed to protect competition, 

not to make it easier or more convenient for an individual competitor to compete, or to charge 

 

12

 Aff’d and remanded for further proceedings on counterclaims, 912 F.2d 463 (4th Cir. 

1990). 

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the prices it would like to charge. The FAC can and should be dismissed on that basis. In 

addition, CollegeNET’s specific antitrust claims fail. We turn to that. 

C. CollegeNET’s Challenged Restraints Do Not Injure Competition Or 

Consumer Welfare As A Matter of Law 

Each of CollegeNET’s claims is based on one or more of four Challenged Restraints: 

“Tying and Bundling/Forced Purchase Requirements”; “Exclusivity Restrictions”; “‘Equal 

Treatment’ Requirements”; and “Uniformity Requirements.” FAC ¶ 15; see also id. ¶¶ 164, 172, 

179, 192, 200-02, 208, 213-14. Beyond CollegeNET’s failure to allege harm to competition and 

antitrust injury generally, each of its claims also fail because none of the Challenged Restraints 

injure competition or otherwise state a claim as a matter of law. 

1. The “Exclusivity Restrictions” Are Per Se Legal Discounts and, in 

Any Event, Do Not Foreclose a Substantial Share of The Market 

CollegeNET alleges that TCA has “coerc[ed]” members into “entering into exclusivity 

agreements.” FAC ¶ 179. “Exclusive dealing involves an agreement between a vendor and a 

buyer that prevents the buyer from purchasing a given good from any other vendor.” Allied 

Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991, 996 (9th Cir. 2010). It 

violates the antitrust laws only if there is “substantial” foreclosure in the relevant market. Tampa 

Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 328 (1961); Allied Orthopedic, 592 F.3d at 996 & 

n.1 (“[T]he plaintiff must prove that the exclusive dealing arrangement actually foreclosed 

competition”). CollegeNET cannot allege an exclusive dealing claim. 

To begin with, TCA has not “coerced” members to do anything. The only “coercion” 

CollegeNET alleges is a modest, two-tiered incentive discount, which TCA members are free to 

accept or not (in fact, two-thirds do not). FAC ¶¶ 74-77 (noting two categories of “exclusivity”); 

RJC Ex. 1, at 1 (stating one-third of members are exclusive). Because CollegeNET does not and 

cannot allege TCA’s discounted prices are below an appropriate measure of cost, they are 

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procompetitive, and cannot support any antitrust claim, as a matter of law. See Atl. Richfield, 

495 U.S. at 337-39; NicSand, Inc. v. 3M Co., 507 F.3d 442, 452 (6th Cir. 2007) (if defendant’s

“price reductions offered to the buyers for the exclusive right to supply a set of stores under 

multi-year contracts” “‘are not predatory, any losses flowing from them cannot be said to stem 

from an anticompetitive aspect of defendant’s conduct. It is in the interest of competition to 

permit . . . firms to engage in vigorous competition, including price competition.’” (quoting Atl. 

Richfield, 495 U.S. at 340-41)). 

In any event, CollegeNET cannot allege facts to support its conclusory allegation that the 

alleged exclusivity agreements “foreclosed a substantial amount of competition in the Online 

College Application Processing Market.” FAC ¶ 180. Courts frequently find exclusive dealing 

to be valid even where 30% or more of the market is foreclosed. See, e.g., Jefferson Parish 

Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 45-46 (1984) (O’Connor, J. concurring) (exclusive 

dealing lawful with 30% foreclosure), abrogated on other grounds, Ill. Tool Works Inc. v. Indep. 

Ink., Inc., 547 U.S. 28 (2006); Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield, 373 

F.3d 57, 69 (1st Cir. 2004) (“[F]oreclosure levels are unlikely to be of concern where they are 

less than 30 or 40 percent. But while low numbers make dismissal easy, high numbers do not 

automatically condemn, but only encourage closer scrutiny.” (citations omitted)); United States 

v. Microsoft Corp., 253 F.3d 34, 70 (D.C. Cir. 2001) (recognizing “the roughly 40% or 50% 

[foreclosure] usually required in order to establish a share § 1 violation); Omega Envtl., 127 F.3d 

at 1162-65 (upholding series of exclusive dealing arrangements that foreclosed 38% of the 

relevant market). 

First, CollegeNET fails to allege any percentage of the market allegedly foreclosed by 

TCA’s alleged exclusive agreements. The absence of factual allegations to support the 

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conclusory allegation of substantial foreclosure alone requires dismissal. See Twombly, 550 U.S. 

at 555; see also Stop & Shop, 373 F.3d at 69 (“[R]eliable [foreclosure] numbers are an essential 

starting point.”). 

Second, CollegeNET’s omission is unsurprising because, in fact, only one-third of TCA 

member colleges are “exclusive.” RJC, Ex. 1, at 1. Even assuming CollegeNET’s allegation 

that TCA’s market share in the Online College Application Processing Market is 60%, (see FAC 

¶ 115), the market foreclosure rate would only be approximately 20% (60% x 33%), far less than 

the 30% or greater foreclosure necessary to allege an exclusive dealing claim. See Omega Envtl., 

127 F.3d at 1162 (“The foreclosed market, in purely quantitative terms, is more accurately 

described as the percentage of [defendant’s] total market share sold through its [exclusive 

customers].” (emphasis added)). 

Third, CollegeNET fails to allege substantial foreclosure because TCA’s membership 

agreements are of short duration and easily terminated, which “negate[s] substantially their 

potential to foreclose competition.” Omega Envtl., 127 F.3d at 1163-64 (citing cases finding 

one-year contracts presumptively legal); PNY Techs., Inc. v. SanDisk Corp., 2014 WL 1677521, 

at *5 (N.D. Cal.) (citing cases where contracts from one to five years were held reasonable). 

CollegeNET concedes that TCA’s membership agreements have a term of only one year. FAC 

¶ 88. Moreover, CollegeNET does not and cannot allege that TCA member colleges could not 

terminate an exclusive agreement at will. A college that is “exclusive” “could choose at anytime 

[sic] to forego the discount offered by [TCA] and purchase from [another] competitor.” Allied 

Orthopedic, 592 F.3d at 997 (finding no substantial foreclosure from market share discounts and 

sole source agreements and noting that “[d]iscounts conditioned on exclusivity in relatively 

short-term contracts are rarely problematic.” (citation omitted)). CollegeNET’s claim that the 

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“penalties” for choosing not to be exclusive are “extreme,” (FAC ¶ 78), is belied by the fact that 

two-thirds of members, including CollegeNET’s example, Harvard, freely choose not to be. 

CollegeNET’s exclusive dealing claim, premised on an above-cost discount and lacking 

any factual allegations of substantial foreclosure, fails as a matter of law. 

2. CollegeNET Fails to State a Claim Based on the Alleged “Tying and 

Bundling/Forced Purchase Requirements” 

CollegeNET alleges TCA unlawfully ties the sale of “Standard College Application 

Data” (the alleged tying product) to “Online College Application Processing” services (the 

alleged tied product). FAC ¶ 192. To state a tying claim, a plaintiff must allege, among other 

things, “that the defendant tied together the sale of two distinct products or services; [and] that 

the defendant possesses enough economic power in the tying product market to coerce its 

customers into purchasing the tied product.” Rick-Mik Enters. Inc. v. Equilon Enters., LLC, 532 

F.3d 963, 971 (9th Cir. 2008). CollegeNET’s tying claim fails because it has not adequately 

alleged that “Standard College Application Data” is a separate product market or, even if it had, 

that TCA has market power in that market. 

“[N]o tying arrangement can exist unless there is a sufficient demand for the purchase of 

[the tied product] separate from [the tying product] to identify a distinct product market in which 

it is efficient to offer” the two products separately. Jefferson Parish, 466 U.S. at 21-22. Where a 

plaintiff alleges tying of “two components of one product,” there are no separate or distinct 

products to support a claim. Hirsh, 674 F.2d at 1350-51. CollegeNET defines “Online College 

Application Processing” services as “online application and evaluation forms and processing 

services offered to Colleges and applicants,” which includes, among other things, “develop[ing] 

a College’s online application and evaluation forms, host[ing] those forms online, [and] 

process[ing] applicants’ form submissions.” FAC ¶ 20. The Common Application falls within 

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this definition. CollegeNET, however, tries to carve out a single feature of the Common 

Application – a “generic, text-based data entry form” for an applicant’s “background 

information,” like name and address – and claim that it constitutes a separate “Standard College 

Application Data” product market. Id. ¶ 118. That attempt fails. 

CollegeNET offers nothing but the conclusory allegation that TCA offers background 

“data” separately from the Common Application itself. FAC ¶ 24. CollegeNET’s factual

allegations prove otherwise. From the beginning, TCA offered a “common, standardized (paper) 

application form,” which “[a]pplicants could fill out . . . once, photocopy it, and submit it to any 

member institution. The form consisted of questions soliciting background information about 

the applicant, a short-answer question, and a selection of essay prompts.” Id. ¶ 38 (emphases 

added). As its name implies, the Common Application has always been a full application that 

students “fill out” and “submit.” CollegeNET cannot separate the background data from the rest 

of the application because both are, “in reality, but a single product” – a college application. See 

Hirsh, 674 F.2d at 1350; see also Montgomery Cnty. Ass’n of Realtors, Inc. v. Realty Photo 

Master Corp., 783 F. Supp. 952, 960-61 (D. Md. 1992) (dismissing tying claim where words and 

pictures in a computerized real estate database were found to be “simply components of one 

product – information”), aff’d, 993 F.2d 1538 (4th Cir. 1993). 

In 1998, TCA started offering this common application online. FAC ¶ 40. While that 

might have made separating the “background information” from the rest of the application 

possible, that does not transform it into a separate market. Cf. Montgomery Cnty., 783 F. Supp. 

at 960 (finding that words and pictures “traditionally [] sold and distributed together” constituted 

a single product even though technological advances separated the two for a short time). That is 

confirmed by CollegeNET’s definition of “Standard College Application Data,” which describes 

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a service that TCA has never offered. For example, member colleges do not “contract with 

[TCA] to allow for the auto-population of their application forms with the applicants’ 

background information.” FAC ¶ 22. Nor has TCA ever offered applicants the ability to “enter[ 

a] unique identification number generated by [TCA]” to “auto-populate[]” applications in a 

“College’s online application system.” Id.

13 This is just another attempt to re-engineer the 

market, force a new business model on TCA, and create an artificial “tying” claim where none 

exists. 

CollegeNET’s claim that background data is a distinct product because “not all Colleges 

that purchase Online College Application Processing services also buy Standard College 

Application Data services” (FAC ¶ 188), misses the point. CollegeNET never alleges that there 

is “sufficient demand” for Standard College Application Data separate from the rest of the 

application.14

 See Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 477-78 (7th Cir. 1988) 

(no separate demand for pathology services apart from hospital services because “patients never 

request and physicians rarely request specific pathologists”). 

Even assuming Standard College Application Data services were a distinct product, 

CollegeNET cannot allege TCA has market power in that alleged market. See Rick–Mik, 532 

F.3d at 972; Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 42-43 (2006) (tying “must be 

supported by proof of power in the relevant [tying] market rather than by a mere presumption 

thereof”). Failure to “plead allegations regarding barriers to entry and the lack of ability by 

 

13 CollegeNET alleges another company, XAP, offers these services, but also alleges that 

XAP is not in the Standard College Application Data services market. See FAC ¶¶ 119-20. 

14 CollegeNET’s allegation that colleges could purchase “Institutional Supplement services” 

separately from “Standard College Application Data services” is further off point. FAC ¶ 190. 

That only alleges the institutional supplement is separate from the Common Application; it has 

nothing to do with whether background data is separate from the Application, and it is not. 

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competitors to increase their share of the” tying product market is a sufficient ground to dismiss 

a tying claim. See Witt, 948 F. Supp. 2d at 1244 (holding that plaintiff failed to allege market 

power, despite 65% market share because “there are insufficient allegations establishing barriers 

to entry”). Not only does CollegeNET fail to allege barriers to entry into the purported Standard 

College Application Data market, it alleges the opposite, claiming those services involve a 

“generic, text-based data entry form for applicants to input their background information” and 

that the “technology required to capture this data, and to store it in a database to transmit to 

subscribing Colleges, is elementary.” FAC ¶ 118 (emphasis added). Thus, there are no barriers 

preventing a competitor from entering the market and offering this “elementary,” “generic” 

service. See United States v. Syufy Enters., 903 F.2d 659, 664 (9th Cir. 1990) (“Time after time, 

we have recognized this basic fact of economic life: A high market share, though it may 

ordinarily raise an inference of monopoly power, will not do so in a market with low entry 

barriers or other evidence of a defendant’s inability to control prices or exclude competitors.”);

Handicomp, Inc. v. U.S. Golf Ass’n, 2000 WL 426245, at *3-4 (3d Cir.) (despite 72% market 

share, defendant lacked market power because there was “no difficulty in programming” the data 

processing system in question and thus plaintiff was “unable to prove substantial barriers to 

entry”). 

3. The “Equal Treatment” Requirement Is Not Exclusionary or a Group 

Boycott 

CollegeNET alleges that TCA’s “equal treatment” requirement “operates as a group 

boycott agreement among members” because by agreeing not to “promote rival providers’ 

applications” over TCA, members have somehow “effectively agreed not to purchase” from rival 

providers including CollegeNET. FAC ¶ 152. A “group boycott” exists where “either (1) two or 

more firms agree not to deal with a competing firm in an industry that requires horizontal dealing 

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. . . or (2) two or more firms agree not to deal with a firm with which they are in a vertical 

relationship in an industry that requires vertical dealing.” Charley’s Taxi Radio Dispatch Corp. 

v. SIDA of Hawaii, Inc., 810 F.2d 869, 877 (9th Cir. 1987). 

CollegeNET’s own allegations demonstrate that the “equal treatment” requirement does 

not fit either scenario. It merely requires a member school that chooses to offer an alternative 

application to promote TCA in an equivalent fashion. Indeed, the language of the requirement 

itself shows that it applies only if and when a member school does choose to deal with 

CollegeNET or another supplier. FAC ¶ 46 (TCA requires “(1) charging an application fee to 

Common Applicants that was ‘no greater than the fee charged for [their] other accepted 

applications’. . . ; (2) providing ‘an equally prominent link to the Common App Online wherever 

[they] post[ed] a link to another online application’; and (3) . . . ‘explicitly offer[ing] any special

benefits (expedited admissions decisions, special scholarship consideration, e.g.) to students 

regardless of the application they choose.’”15 (emphases added)). CollegeNET admits, as it 

must, that “members are permitted to offer their own, institution-specific application,” and that 

some of them contract with CollegeNET to do so. FAC ¶¶ 150-51. Thus, it concedes there is no 

group boycott of CollegeNET or any other supplier. 

4. TCA’s “Uniformity Requirements” Are Procompetitive as a Matter of 

Law 

Finally, CollegeNET claims that TCA’s “uniformity requirements” “limit[] the value 

applicants derive from the application process.” FAC ¶ 155. Of course, the whole idea of 

offering a “common application” requires some degree of “uniformity.” Such standardization, 

 

15 CollegeNET’s FAC erroneously inserted a “not” before “explicitly offer[ing] any special 

benefits . . . ,” implying that the equal treatment requirement prohibits special benefits to 

applicants. FAC ¶ 46. The requirement says the exact opposite. It instructs member schools 

that they must “explicitly offer” such benefits to students “regardless of the application they 

choose.” RJC, Ex. 2, at 3. 

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ubiquitous in everything from DVDs to tires, by definition reduces variety to increase 

compatibility and generate procompetitive benefits a fragmented market would not otherwise 

provide, including “facilitating economies of scale in the market for complementary goods, 

reducing consumer search costs, and increasing economic efficiency.” Golden Bridge Tech., Inc. 

v. Motorola, Inc., 547 F.3d 266, 273 (5th Cir. 2008); see also Princo Corp. v. ITC, 616 F.3d 

1318, 1335 (Fed. Cir. 2010) (en banc) (“Collaboration for the purpose of developing and 

commercializing new technology can result in economies of scale and integrations of 

complementary capacities that reduce costs, facilitate innovation, eliminate duplication of effort 

and assets, and share risks that no individual member would be willing to undertake alone, 

thereby promot[ing] rather than hinder[ing] competition.” (internal quotations omitted)). 

The FAC demonstrates how TCA’s “uniformity requirements” generate procompetitive 

benefits by simplifying the college application process for member colleges and students alike. 

See FAC ¶¶ 38, 41. First, the Common Application allows students to apply more easily to 

multiple colleges, which reduces search and transactions costs. See Clamp-All Corp. v. Cast Iron 

Soil Pipe Inst., 851 F.2d 478, 487 (1st Cir. 1988) (finding procompetitive benefit from “the joint 

development and promulgation of [certain] specification[s that] would seem to save money by 

providing information to makers and to buyers less expensively and more effectively than 

without the standard”). Second, standardizing the application creates economies of scale and 

increases efficiency by allowing colleges to attract more applicants while reducing per 

application cost. See Golden Bridge, 547 F.3d at 273. The increased output of applications (see

FAC ¶¶ 44, 50, 82), reflects, and in turn creates, more competition among colleges for a growing 

number of applicants, and increases the choices of colleges readily available to students. Part 

IV.A, above. 

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CollegeNET’s complaints about the degree of standardization are not the concern of 

antitrust law. CollegeNET alleges TCA’s uniformity requirements produce an inferior product 

by limiting customization (including the “look and feel” of the application) and students’ ability 

to offer customized information in the application. FAC ¶¶ 15, 64, 155. Those quibbles are 

misplaced, even if they were correct (they are not), because “it is not antitrust’s mission to 

correct standards that are substantively wrong or even irrational, but only to seek out injuries to 

competition.” Areeda & Hovenkamp, ¶ 2232d at 456; see also ECOS Elecs. Corp., 743 F.2d at 

502; Baum Research & Dev. Co. v. Hillerich & Bradsby Co., 31 F. Supp. 2d 1016, 1019-23 

(E.D. Mich. 1998) (rejecting alleged “safety” concern arising from defendant’s standard-setting 

where it pose[d] no threat to competition in the relevant market. In fact, there is a logical 

inference that [the challenged conduct] ... actually fosters competition.”). CollegeNET also 

cannot “indirectly force” TCA “to raise its prices by forcing [it] to raise its standards.” ECOS 

Elecs. Corp., 743 F.2d at 502. 

In any event, the “uniformity requirements” have not “reduced competition” among TCA 

members. See FAC ¶ 155. It is economically implausible, and nonsensical, to claim that 

colleges would try to reduce competition for students by making it easier for students to apply to 

more colleges, which would only increase competition for applicants by presenting them with

more choices. See William O. Gilley, 588 F.3d at 662. In fact, the availability of the Common 

Application as an option (as opposed to only individualized applications) gives colleges more 

choices to attract students. See Princo, 616 F.3d at 1335. While that choice might make 

competitive life harder for CollegeNET and other suppliers of individualized applications, that is 

not an antitrust concern. See, e.g., Am. Ad Mgmt., 190 F.3d at 1055. 

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V. CONCLUSION 

The FAC, CollegeNET’s best effort, fails both generally and specifically as a matter of 

antitrust law, because it makes clear that CollegeNET challenges the effects of vigorous and 

lawful competition. No further amendment could cure that fundamental deficiency. The FAC 

should be dismissed without leave to amend. 

DATED: December 23, 2014 Respectfully submitted, 

MORGAN, LEWIS & BOCKIUS LLP 

By: /s/ Thane D. Scott 

Thane D. Scott, Pro Hac Vice 

Attorneys for Defendant 

The Common Application, Inc. 

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