United States v. National Association for College Admission Counseling; Proposed Final Judgment and Competitive Impact Statement

Published date10 January 2020
Record Number2020-00213
SectionNotices
CourtAntitrust Division
Federal Register, Volume 85 Issue 7 (Friday, January 10, 2020)
[Federal Register Volume 85, Number 7 (Friday, January 10, 2020)]
                [Notices]
                [Pages 1329-1338]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-00213]
                [[Page 1329]]
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                DEPARTMENT OF JUSTICE
                Antitrust Division
                United States v. National Association for College Admission
                Counseling; Proposed Final Judgment and Competitive Impact Statement
                 Notice is hereby given pursuant to the Antitrust Procedures and
                Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
                Stipulation, and Competitive Impact Statement have been filed with the
                United States District Court for the District of Columbia in United
                States of America v. National Association for College Admission
                Counseling, Civil Action No. 1:19-cv-03706. On December 12, 2019, the
                United States filed a Complaint alleging that the National Association
                for College Admission Counseling (``NACAC'') enacted certain mandatory
                rules (collectively referred to as the ``Recruiting Rules'') that
                unlawfully limited competition between its members in violation of
                Section 1 of the Sherman Act, 15 U.S.C. 1. The proposed Final Judgment,
                filed at the same time as the Complaint, prevents NACAC from re-
                imposing those or any similar rules. The proposed Final Judgment also
                requires NACAC to take specific compliance measures and to cooperate in
                any investigation or litigation examining whether or alleging that
                NACAC enacted a Recruiting Rule or any similar rule in violation of
                Section 1 of the Sherman Act, 15 U.S.C. 1.
                 Copies of the Complaint, proposed Final Judgment, and Competitive
                Impact Statement are available for inspection on the Antitrust
                Division's website at http://www.justice.gov/atr and at the Office of
                the Clerk of the United States District Court for the District of
                Columbia. Copies of these materials may be obtained from the Antitrust
                Division upon request and payment of the copying fee set by Department
                of Justice regulations.
                 Public comment is invited within 60 days of the date of this
                notice. Such comments, including the name of the submitter, and
                responses thereto, will be posted on the Antitrust Division's website,
                filed with the Court, and, under certain circumstances, published in
                the Federal Register. Comments should be directed to Aaron Hoag, Chief,
                Technology and Financial Services Section, Antitrust Division,
                Department of Justice, 450 Fifth Street NW, Suite 7100, Washington, DC
                20530 (telephone: 202-514-4890).
                Amy Fitzpatrick,
                Counsel to the Senior, Director of Investigations and Litigation.
                United States District Court for the District of Columbia
                 United States of America, Department of Justice, Antitrust
                Division, 450 5th Street NW, Suite 7100, Washington, DC 20530,
                Plaintiff, v. National Association for College Admission Counseling,
                1050 North Highland St., Suite 400, Arlington, VA 22201, Defendant.
                Complaint
                 The United States of America, acting under the direction of the
                Attorney General of the United States, brings this civil antitrust
                action to obtain equitable relief against Defendant National
                Association for College Admission Counseling. The United States alleges
                as follows.
                I. Introduction
                 1. This action challenges under Section 1 of the Sherman Act, 15
                U.S.C. 1, a number of rules that restrained competition between
                colleges and universities (``colleges'') for the recruitment of first-
                year and transfer students.
                 2. Defendant National Association for College Admission Counseling
                (``NACAC'') is the leading national trade association for college
                admissions. Defendant's members are divided roughly into two groups:
                Non-profit colleges and their admissions personnel, and high schools
                and their guidance counselors. NACAC's college members compete
                vigorously with each other for college students, both incoming freshmen
                and transfer students. These colleges compete in a variety of college
                services, including tuition cost, majors offered, ease and cost of
                application, campus amenities, quality of education, reputation of the
                institution, and prospects for employment following graduation.
                 3. One condition of membership in NACAC is adherence to NACAC's
                Code of Ethics and Professional Practices (``CEPP'' or ``Ethics
                Rules''), which sets forth mandatory rules for how member organizations
                engage in college admissions. These rules are drafted, voted on, and
                enforced by NACAC members.
                 4. As part of its CEPP, NACAC includes certain rules regarding the
                recruitment of students by colleges. Prior to September 2019, among
                these rules were ones that prevented, or severely limited, colleges
                from (1) directly recruiting transfer students from another college,
                (2) offering incentives of any kind to college applicants who applied
                via a process known as Early Decision, and (3) recruiting incoming
                college freshmen after May 1 (together, ``Recruiting Rules'').
                 5. The Recruiting Rules were not reasonably necessary to any
                separate, legitimate procompetitive collaboration between NACAC
                members. As part of its CEPP, NACAC establishes many rules and
                regulations for its members' conduct throughout the college admissions
                process, including, among others, when applications may open and close,
                the definitions of Early Decision and Early Access, and the use of paid
                agents in recruiting students. Many of these rules appear to strengthen
                the market for college admissions. The Recruiting Rules, however, were
                not reasonably necessary to achieve the otherwise market-enhancing
                rules contained in the CEPP, and furthermore had the effect of
                unlawfully restraining competition among NACAC's college members,
                resulting in harm to college applicants and potential transfer
                students.
                 6. By establishing and enforcing the Recruiting Rules, NACAC
                substantially reduced competition among colleges for college applicants
                and potential transfer students and deprived these consumers of the
                benefits that result from colleges vigorously competing for students.
                These Recruiting Rules, which were horizontal agreements among the
                schools participating in NACAC, denied American college applicants and
                potential transfer students access to competitive financial aid
                packages and benefits and restricted their opportunities to move
                between colleges.
                 7. In September 2019, NACAC members voted to remove the Recruiting
                Rules from the CEPP. Removal of the Recruiting Rules became effective
                as of the time of the vote.
                 8. NACAC's Recruiting Rules were unlawful restraints of trade that
                violated Section 1 of the Sherman Act, 15 U.S.C. 1. The United States
                seeks an order prohibiting such agreements and other relief.
                II. Jurisdiction and Venue
                 9. Defendant NACAC is located in, and represents members that do
                business in, the United States. The rules at issue affected primarily
                the provision of college services in the United States. The colleges
                that provide these college services charge significant prices to
                students, many of whom legally reside outside the state. The sale of
                college services, and the NACAC rules that affect the sale, are
                therefore in the flow
                [[Page 1330]]
                of and substantially affect interstate commerce. The Court has subject
                matter jurisdiction under Section 4 of the Sherman Act, 15 U.S.C. 4,
                and under 28 U.S.C. 1331 and 1337, to prevent and restrain Defendant
                and its members from violating Section 1 of the Sherman Act, 15 U.S.C.
                1.
                 10. Defendants have consented to venue and personal jurisdiction in
                this district. Venue is proper in this district under Section 12 of the
                Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1391.
                III. Defendant
                 11. Defendant NACAC is a trade association comprised of college
                admissions personnel and high school guidance counselors and their
                respective institutions. Although NACAC does have members around the
                world, its principal focus is on college admissions in the United
                States. NACAC currently has in excess of 15,000 members, representing
                several thousand colleges and high schools. In addition to maintaining
                and enforcing the CEPP, NACAC provides educational training to members,
                engages in lobbying and other public outreach, and holds dozens of
                popular college fairs that allow colleges to meet and recruit
                prospective students.
                IV. Trade and Commerce
                 12. NACAC is the largest trade association focused on college
                admissions in the United States.
                 13. There is significant competition among colleges for college
                students, especially incoming freshmen. Colleges compete on a number of
                different dimensions of college services, including tuition cost,
                majors offered, ease and cost of application, campus amenities, quality
                of education, reputation of the institution, and prospects for
                employment following graduation. The focal point for that competition
                is the college admissions process.
                 14. Colleges employ a number of competitive tactics to encourage
                students to apply for admission to, and ultimately attend, their
                institutions. Colleges typically heavily advertise to prospective
                applicants, including by sending physical and electronic mailings, by
                participating in college fairs, and by direct solicitation on high
                school campuses. Competition, however, does not end there. If a
                prospective student is accepted by more than one college, there is
                typically a competitive negotiation between the student and each
                college over the financial aid package offered to the student.
                Additionally, if a college has not met its enrollment goals by the
                summer before school begins, it often will reach back out to
                prospective students to make a competitive pitch to entice the student
                to commit to enrolling at the college in the fall. Finally, even after
                classes begin, many colleges advertise college transfer programs that
                allow students to move from one college to another between semesters.
                 15. In competitive circumstances, colleges would compete vigorously
                for students to purchase their college services. This competition
                benefits students because it lowers the cost of attendance and
                increases the incentive that the colleges have to provide high quality
                or innovative services. Competition also improves an applicant's
                ability to negotiate for a better financial aid package with the
                college. Defendant's Recruiting Rules, however, blunted several avenues
                of competition for students and disrupted the normal competitive
                mechanisms that would otherwise apply.
                V. The Unlawful Rules
                 16. For decades, NACAC has had a set of rules governing the college
                admissions process for its members. Historically, some of the rules
                were mandatory for all members, and others were voluntary ``best
                practices.'' In 2017, NACAC members voted to reformulate the mandatory
                rules into the 2017 CEPP. The CEPP rules are mandatory for all NACAC
                members, which includes most non-profit colleges and universities in
                the United States, and also for any non-member institutions that
                participate in NACAC's college fairs. Accordingly, agreeing to NACAC
                membership, or agreeing to participate in a NACAC college fair, is
                equivalent to agreeing with other members or college fair participants
                to execute on the restrictions in the CEPP. The 2017 CEPP governs many
                aspects of the college admissions process for its members, including,
                most relevant to this action, the recruitment of students.
                 17. The 2017 CEPP included several rules that unreasonably
                restricted some of the ways in which colleges recruited incoming
                freshmen and transfer students. The three Recruiting Rules at issue in
                this case are (1) the Transfer Student Recruiting Rule, (2) the Early
                Decision Incentives Rule, and (3) the First-Year Undergraduate
                Recruiting Rule. While the CEPP certainly included rules and
                regulations that were aimed at, and actually do, increase
                competitiveness between schools and ease the burden of students
                applying to college, these Recruiting Rules were not reasonably
                necessary to those procompetitive rules or any other separate,
                legitimate business transaction or collaboration between NACAC's
                members. Prior to the 2017 CEPP, virtually identical rules were voted
                on and included in earlier NACAC rules and have been in place for
                years.
                A. Transfer Student Recruiting Rule
                 18. The Transfer Student Recruiting Rule was codified at paragraph
                II.D.5 of the 2017 CEPP and instructed that, ``[c]olleges must not
                solicit transfer applications from a previous year's applicant or
                prospect pool unless the students have themselves initiated a transfer
                inquiry or the college has verified prior to contacting the students
                that they are either enrolled at a college that allows transfer
                recruitment from other colleges or are not currently enrolled in a
                college.''
                 19. The Transfer Student Recruiting Rule acted as a ban on
                affirmatively recruiting transfer students, unduly restraining
                competition for transfer students amongst colleges.
                 20. Without this opportunity for colleges to compete, potential
                transfer students may be unaware of transfer opportunities that may
                provide them lower priced or higher quality college services.
                 21. Absent the Transfer Student Recruiting Rule, colleges can
                engage in significantly more recruitment of transfer students through
                direct solicitation or otherwise. Furthermore, colleges will likely
                seek to provide better experiences to their existing student base in
                order to retain them in the face of increased competition for
                transfers.
                B. Early Decision Incentives Rule
                 22. The Early Decision Incentives Rule was codified at paragraph
                II.A.3.a.vi of the 2017 CEPP and provided that ``[c]olleges must not
                offer incentives exclusive to students applying or admitted under an
                Early Decision application plan. Examples of incentives include the
                promise of special housing, enhanced financial aid packages, and
                special scholarships for Early Decision admits.''
                 23. NACAC defined Early Decision in the 2017 CEPP as an application
                plan where ``[s]tudents commit to a first-choice college and, if
                admitted, agree to enroll and withdraw their other college
                applications.'' The Early Decision application plan is akin to an
                exclusive contract in any other industry. In this case, the student
                foregoes the opportunity to consider the competitive offers of other
                institutions in exchange for an early decision on acceptance. Colleges
                thus stand as direct competitors for Early Decision
                [[Page 1331]]
                applicants, because those applicants are far more likely, if accepted,
                to attend the college. This results in an increased yield, which is the
                percentage of accepted applicants that choose to attend the college.
                Yield is critically important to colleges--overestimating expected
                yield can lead to less students attending than anticipated (thus
                lowering total tuition received), which could force the college to cut
                classes or layoff staff. The increased yield from Early Decision
                applicants is financially significant to colleges.
                 24. The Early Decision Incentives Rule explicitly limited the scope
                of competition for Early Decision students by removing the ability of
                colleges to incent students financially or otherwise. At base, the only
                form of payment an institution may provide in exchange for the
                exclusive contract with an applicant is the early decision itself. The
                rule prohibited all other forms of competition specifically targeted at
                particular Early Decision applicants.
                 25. Absent the Early Decision Incentives Rule, colleges are free to
                use any number of competitive levers to more aggressively recruit
                students. Some institutions may prefer to offer only the early
                decision, while others might compete more aggressively, such as by
                offering scholarships, preferential housing, or early course
                registration for those admitted under Early Decision.
                C. First-Year Undergraduate Recruiting Rule
                 26. The First-Year Undergraduate Recruiting Rule was codified at
                paragraph II.B.5 of the 2017 CEPP and required that, among other
                things, ``[c]olleges will not knowingly recruit or offer enrollment
                incentives to students who are already enrolled, registered, have
                declared their intent, or submitted contractual deposits to other
                institutions.'' Furthermore, while the rule allowed colleges to
                ``contact students who have neither deposited nor withdrawn their
                applications to let them know that they have not received a response
                from them,'' it also commanded that schools could ``neither offer nor
                imply additional financial aid or other incentives'' were available
                unless the student had ``affirmed that they [had] not deposited
                elsewhere and [were] still interested in discussing fall enrollment.''
                 27. The First-Year Undergraduate Recruiting Rule imposed
                significant restraints on a college's ability to recruit students. The
                rule created an arbitrary deadline of May 1 for all colleges to cease
                improving their recruitment offers to students, even though many
                students do not decide on a college until well after May 1 and many
                colleges therefore can reallocate resources to make better offers after
                May 1. Furthermore, the rule imposed significant hurdles before a
                college could improve its offer to a prospective student, requiring
                that the student first affirm both that they ``[had] not deposited
                elsewhere'' and were ``still interested in discussing fall
                enrollment.'' By directly limiting the ability of colleges to improve
                their offers to students, the First-Year Undergraduate Recruiting Rule
                operated as a significant restraint on competition.
                 28. The arbitrariness of the May 1 deadline was fully highlighted
                by the recognized exception to the rule ``when students are admitted
                from a wait list.'' Section II.C of the CEPP regulates institutions'
                use of wait lists and explicitly authorizes schools to accept students
                off of a wait list as late as August 1, even when those students have
                already committed to attend another school. NACAC thus allows for
                vigorous competition over a student already committed to another school
                when a change in circumstances frees up a spot for a student on the
                wait list. The change in circumstances that free up additional
                resources to make a better offer is not conceptually distinct, but the
                rules explicitly allowed the former and prohibited the latter,
                restricting an opportunity for students to benefit from the sorting
                process.
                 29. Absent the First-Year Undergraduate Recruiting Rule,
                institutions are free to continue to improve their offers to students
                after May 1, to the benefit of those students. If students have made up
                their minds about their school of choice, or are otherwise insensitive
                to the change in circumstances, they can simply reject any further
                offers received from other schools. For students who may change their
                minds due to a more beneficial offer, continued recruitment can only
                work to their benefit.
                VI. Violation Alleged
                 30. Defendant's college members are direct competitors in college
                services and compete vigorously for students. Defendant coordinated and
                enforced an anticompetitive agreement that restrained colleges from
                improving their offers or otherwise competing vigorously to be selected
                by students in the college admissions process.
                 31. Defendant's Recruiting Rules eliminated significant forms of
                competition to attract students. These rules, which were horizontal
                agreements between NACAC's college members, denied college applicants
                and potential transfer students access to potentially better financial
                aid packages and benefits and restricted their opportunities to move
                between colleges that offered superior services.
                 32. Accordingly, Defendant's Recruiting Rules constituted
                unreasonable restraints of trade in violation of Section 1 of the
                Sherman Act, 15 U.S.C. 1.
                VII. Request for Relief
                 33. The United States requests that this Court:
                 (a) Adjudge and decree that Defendant's Recruiting Rules are
                unreasonable restraints of trade and interstate commerce in violation
                of Section 1 of the Sherman Act;
                 (b) enjoin and restrain Defendant from enforcing or adhering to any
                Recruiting Rules that unreasonably restrict competition for students;
                 (c) permanently enjoin and restrain Defendant from establishing
                similar rules in the future, except as prescribed by the Court;
                 (d) award the United States such other relief as the Court may deem
                just and proper to redress and prevent recurrence of the alleged
                violations and to dissipate the anticompetitive effects of the illegal
                agreements entered into by Defendant; and
                 (e) award the United States the costs of this action.
                Dated: December 12, 2019.
                Respectfully submitted,
                FOR PLAINTIFF UNITED STATES OF AMERICA
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                Makan Delrahim,
                Assistant Attorney General for Antitrust.
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                Aaron D. Hoag,
                Chief, Technology and Financial Services Section.
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                Bernard A. Nigro, Jr. (D.C. Bar #412357),
                Principal Deputy Assistant Attorney General.
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                Danielle Hauck,
                Adam Severt,
                Assistant Chiefs, Technology and Financial Services Section.
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                Kathleen O'Neill,
                Senior Director of Investigations and Litigation.
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                Ryan S. Struve (D.C. Bar #495406),
                Travis Chapman,
                Aaron Comenetz (D.C. Bar #479572),
                Erin Craig,
                Adrienne Hahn,
                Trial Attorneys.
                United States Department of Justice, Antitrust Division, Technology
                and Financial Services Section, 450 Fifth Street NW, Suite 7100,
                Washington, DC 20530, Telephone: (202) 514-4890, Email:
                [email protected].
                [[Page 1332]]
                United States District Court for the District of Columbia
                 United States of America, Plaintiff, v.
                 National Association for College Admission Counseling,
                Defendant.
                [Proposed] Final Judgment
                 Whereas, Plaintiff, United States of America, filed its Complaint
                on [DATE], alleging that Defendant National Association for College
                Admission Counseling violated Section 1 of the Sherman Act, 15 U.S.C.
                Sec. 1, the United States and the Defendant, by its attorneys, have
                consented to the entry of this Final Judgment without trial or
                adjudication of any issue of fact or law;
                 And whereas, this Final Judgment does not constitute any evidence
                against or admission by any party regarding any issue of fact or law;
                 And whereas, the Defendant agrees to be bound by the provisions of
                this Final Judgment pending its approval by this Court;
                 And whereas, the Defendant agrees to undertake certain actions and
                refrain from certain conduct for the purpose of remedying the
                anticompetitive effects alleged in the Complaint;
                 Now therefore, before any testimony is taken, without trial or
                adjudication of any issue of fact or law, and upon consent of the
                parties, it is ordered, adjudged, and decreed:
                I. Jurisdiction
                 This Court has jurisdiction over the subject matter and each of the
                parties to this action. The Complaint states a claim upon which relief
                may be granted against the Defendant under Section 1 of the Sherman
                Act, as amended, 15 U.S.C. 1.
                II. Definitions
                 As used in this Final Judgment:
                 A. ``NACAC'' and ``Defendant'' mean the National Association for
                College Admission Counseling, a non-profit trade association with its
                headquarters in Arlington, Virginia, its successors and assigns, and
                its subsidiaries, divisions, groups, affiliates, partnerships, and
                joint ventures, and their directors, officers, managers, agents, and
                employees.
                 B. ``Agreement'' means any agreement, understanding, pact,
                contract, or arrangement, formal or informal, oral or written, between
                two or more persons.
                 C. ``Early Decision'' means the college application plan as defined
                and used by the Ethics Rules.
                 D. ``Early Decision Incentives Rule'' means any Rule or Agreement,
                or part of a Rule or Agreement, including, but not limited to, Section
                II.A.3.a.vi of the Ethics Rules, that restrains any person from
                offering incentives to students applying under an Early Decision
                application plan that are not available to students applying under a
                different application plan.
                 E. ``First-Year Undergraduate Recruiting Rule'' means any Rule or
                Agreement, or part of a Rule or Agreement, including, but not limited
                to, Section II.B.5 of the Ethics Rules, that restrains any college or
                university from recruiting or offering enrollment incentives to first-
                year college applicants on the basis that (a) a particular date has
                passed; (b) the applicants have either declined admission or not
                affirmatively indicated that they are still interested in attending
                that institution; or (c) the applicants have already enrolled in,
                registered at, declared their intent to enroll in or register at, or
                submitted contractual deposits to other institutions.
                 F. ``Transfer Student Recruiting Rule'' means any Rule or
                Agreement, or part of a Rule or Agreement, including, but not limited
                to, Section II.D.5 of the Ethics Rules, that restrains any person from
                recruiting or offering enrollment incentives to transfer students.
                 G. ``Ethics Rules'' means NACAC's Code of Ethics and Professional
                Practices.
                 H. ``Rule'' means an enforceable regulation governing particular
                conduct or activities.
                 I. ``Person'' means any natural person, college or university,
                corporation, company, partnership, joint venture, firm, association,
                proprietorship, agency, board, authority, commission, office, or other
                business or legal entity, whether private or governmental.
                 J. ``Management'' means all officers, directors, committee chairs,
                and board members of NACAC, or any other person with management or
                supervisory responsibilities for NACAC's operations.
                III. Applicability
                 This Final Judgment applies to NACAC, and to all other persons in
                active concert or participation with NACAC who receive actual notice of
                this Final Judgment by personal service or otherwise.
                IV. Prohibited Conduct
                 Defendant shall not establish, attempt to establish, maintain, or
                enforce any Early Decision Incentives Rule, Transfer Student Recruiting
                Rule, or First-Year Undergraduate Recruiting Rule. To the extent such
                prohibited rules currently exist in the Ethics Rules, Defendant must
                promptly abolish them.
                V. Conduct Not Prohibited
                 Nothing in Section IV shall prohibit Defendant from maintaining or
                enforcing any current provisions in the Ethics Rules other than those
                specifically enumerated in Paragraphs II.D, E, and F.
                VI. Required Conduct
                 A. Within ten (10) days of entry of this Final Judgment, Defendant
                shall appoint an Antitrust Compliance Officer and identify to United
                States the Antitrust Compliance Officer's name, business address, and
                telephone number. Within forty-give (45) days of a vacancy in the
                Defendant's Antitrust Compliance Officer position, the Defendant shall
                appoint a replacement, and shall identify to the United States the
                replacement Antitrust Compliance Officer's name, business address,
                telephone number, and email address. The Defendant's initial or
                replacement appointment of an Antitrust Compliance Officer is subject
                to the approval of the United States in its sole discretion.
                 B. The Antitrust Compliance Officer shall:
                 1. Within sixty (60) days of entry of the Final Judgment, furnish
                to all of the Defendant's Management a copy of this Final Judgment, the
                Competitive Impact Statement, and a cover letter in a form attached as
                Exhibit 1;
                 2. within sixty (60) days of entry of the Final Judgment, in a
                manner to be devised by Defendant and approved by the United States,
                provide the Defendant's Management and employees reasonable notice of
                the meaning and requirements of this Final Judgment;
                 3. annually brief the Defendant's Management on the meaning and
                requirements of this Final Judgment and the antitrust laws;
                 4. brief any person who succeeds a person in any position
                identified in Paragraph II(J), within sixty (60) days of such
                succession;
                 5. obtain from each member of Management, within sixty (60) days of
                that person's receipt of the Final Judgment, a certification that he or
                she (i) has read and, to the best of his or her ability, understands
                and agrees to abide by the terms of this Final Judgment; (ii) is not
                aware of any violation of the Final Judgment that has not been reported
                to the Defendant; and (iii) understands that any person's failure to
                comply with this Final Judgment may result in an enforcement action for
                civil or criminal contempt of court against the Defendant and/or any
                person who violates this Final Judgment;
                 6. maintain a record of certifications received pursuant to this
                Section; and
                [[Page 1333]]
                 7. annually communicate to the Defendant's Management and employees
                that they may disclose to the Antitrust Compliance Officer, without
                reprisal, information concerning any potential violation of this Final
                Judgment or the antitrust laws.
                 C. Within sixty (60) days of entry of the Final Judgment, Defendant
                shall furnish notice of this action to its members through (1) direct
                communication, in a form approved by the United States prior to
                communication and containing the text of Exhibit 2 and (2) the creation
                of website pages linked to the Defendant website, to be posted for no
                less than one (1) year after the date of entry of the Final Judgment,
                containing the text of Exhibit 2 and links to the Final Judgment,
                Competitive Impact Statement, and Complaint on the Antitrust Division's
                website.
                 D. Defendant shall:
                 1. Upon Management's or the Antitrust Compliance Officer's learning
                of any violation or potential violation of any of the terms and
                conditions contained in this Final Judgment, promptly take appropriate
                action to investigate, and in the event of a violation, terminate or
                modify the activity so as to comply with this Final Judgment and
                maintain all documents related to any violation or potential violation
                of this Final Judgment;
                 2. within sixty (60) days of Management's or the Antitrust
                Compliance Officer's learning of any violation or potential violation
                of any of the terms and conditions contained in this Final Judgment,
                file with the United States a statement describing any violation or
                potential violation, which shall include a description of any
                communications constituting the violation or potential violation,
                including the date and place of the communication, the persons
                involved, and the subject matter of the communication, and steps taken
                to remedy any violation; and
                 3. have its CEO or CFO, and its General Counsel, certify in writing
                to the United States annually on the anniversary date of the entry of
                this Final Judgment that the Defendant has complied with the provisions
                of this Final Judgment.
                VII. Compliance Inspection
                 A. For the purposes of determining or securing compliance with this
                Final Judgment, or of determining whether the Final Judgment should be
                modified or vacated, and subject to any legally recognized privilege,
                from time to time authorized representatives of the United States,
                including agents retained by the United States, shall, upon the written
                request of an authorized representative of the Assistant Attorney
                General in charge of the Antitrust Division, and on reasonable notice
                to Defendant be permitted:
                 1. Access during Defendant's office hours to inspect and copy, or
                at the option of the United States, to require Defendant to provide
                electronic or hard copies of, all books, ledgers, accounts, records,
                data, and documents in the possession, custody, or control of NACAC,
                relating to any matters contained in this Final Judgment; and
                 2. to interview, either informally or on the record, Defendant's
                Management, officers, employees, or agents, who may have their
                individual counsel present, regarding such matters. The interviews
                shall be subject to the reasonable convenience of the interviewee and
                without restraint or interference by Defendant.
                 B. Upon the written request of an authorized representative of the
                Assistant Attorney General in charge of the Antitrust Division,
                Defendant shall submit written reports or responses to written
                interrogatories, under oath if requested, relating to any of the
                matters contained in this Final Judgment as may be requested.
                 C. No information or documents obtained by the means provided in
                this Section VII shall be divulged by the United States to any person
                other than an authorized representative of the executive branch of the
                United States, except in the course of legal proceedings to which the
                United States is a party (including grand jury proceedings), or for the
                purpose of securing compliance with this Final Judgment, or for law
                enforcement purposes, or as otherwise required by law.
                 D. If at the time information or documents are furnished by
                Defendant to the United States, Defendant represents and identifies in
                writing the material in any such information or documents to which a
                claim of protection may be asserted under Rule 26(c)(1)(G) of the
                Federal Rules of Civil Procedure, and Defendant marks each pertinent
                page of such material, ``Subject to claim of protection under Rule
                26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
                States shall give Defendant ten (10) calendar days' notice prior to
                divulging such material in any legal proceeding (other than a grand
                jury proceeding).
                VIII. Retention of Jurisdiction
                 This Court retains jurisdiction to enable any party to this Final
                Judgment to apply to this Court at any time for further orders and
                directions as may be necessary or appropriate to carry out or construe
                this Final Judgment, to modify any of its provisions, to enforce
                compliance, and to punish violations of its provisions.
                IX. Enforcement of Final Judgment
                 A. The United States retains and reserves all rights to enforce the
                provisions of this Final Judgment, including the right to seek an order
                of contempt from the Court. Defendant agrees that in any civil contempt
                action, any motion to show cause, or any similar action brought by the
                United States regarding an alleged violation of this Final Judgment,
                the United States may establish a violation of the Final Judgment and
                the appropriateness of any remedy therefor by a preponderance of the
                evidence, and Defendant waives any argument that a different standard
                of proof should apply.
                 B. This Final Judgment should be interpreted to give full effect to
                the procompetitive purposes of the antitrust laws and to restore all
                competition the United States alleged was harmed by the challenged
                conduct. Defendant agrees that it may be held in contempt of, and that
                the Court may enforce, any provision of this Final Judgment that, as
                interpreted by the Court in light of these procompetitive principles
                and applying ordinary tools of interpretation, is stated specifically
                and in reasonable detail, whether or not it is clear and unambiguous on
                its face. In any such interpretation, the terms of this Final Judgment
                should not be construed against either party as the drafter.
                 C. In any enforcement proceeding in which the Court finds that
                Defendant has violated this Final Judgment, the United States may apply
                to the Court for a one-time extension of this Final Judgment, together
                with other relief as may be appropriate. In connection with any
                successful effort by the United States to enforce this Final Judgment
                against Defendant, whether litigated or resolved before litigation,
                Defendant agrees to reimburse the United States for the fees and
                expenses of its attorneys, as well as any other costs, including
                experts' fees, incurred in connection with that enforcement effort,
                including in the investigation of the potential violation.
                 D. For a period of four (4) years following the expiration of the
                Final Judgment, if the United States has evidence that Defendant
                violated this Final Judgment before it expired, the United States may
                file an action against Defendant in this Court requesting that the
                Court order (1) Defendant to comply with the terms of this Final
                Judgment for an additional term of at least four
                [[Page 1334]]
                years following the filing of the enforcement action under this
                Section, (2) any appropriate contempt remedies, (3) any additional
                relief needed to ensure the Defendant complies with the terms of the
                Final Judgment, and (4) fees or expenses as called for in Paragraph
                IX(C).
                X. Expiration of Final Judgment
                 Unless this Court grants an extension, this Final Judgment shall
                expire seven (7) years from the date of its entry, except that after
                five (5) years from the date of its entry, this Final Judgment may be
                terminated upon notice by the United States to the Court and Defendant
                that the continuation of the Final Judgment no longer is necessary or
                in the public interest.
                XI. Notice
                 For purposes of this Final Judgment, any notice or other
                communication required to be provided to the United States shall be
                sent to the person at the address set forth below (or such other
                addresses as the United States may specify in writing to Defendant):
                Chief, Technology and Financial Services Section, U.S. Department of
                Justice, Antitrust Division, 450 Fifth Street NW, Suite 7100,
                Washington, DC 20530.
                XII. Public Interest Determination
                 Entry of this Final Judgment is in the public interest. The parties
                have complied with the requirements of the Antitrust Procedures and
                Penalties Act, 15 U.S.C. 16, including making copies available to the
                public of this Final Judgment, the Competitive Impact Statement, and
                any comments thereon and the United States' responses to comments.
                Based upon the record before the Court, which includes the Competitive
                Impact Statement and any comments and response to comments filed with
                the Court, entry of this Final Judgment is in the public interest.
                Date:------------------------------------------------------------------
                Court approval subject to procedures of Antitrust Procedures and
                Penalties Act, 15 U.S.C. 16
                -----------------------------------------------------------------------
                United States District Judge
                Exhibit 1
                [Company Letterhead]
                [Name and Address of Antitrust Compliance Officer]
                Re: Early Decision Incentives Rule, Transfer Student Recruiting Rule,
                or First-Year Undergraduate Recruiting Rule
                Dear [XX]:
                 I am providing you this notice regarding a judgment recently
                entered by a federal judge in Washington, DC affecting rulemaking
                practices. The judgment applies to our association and all of its
                employees, including you, so it is important that you understand the
                obligations it imposes on us. [CEO Name] has asked me to let each of
                you know that [s/he] expects you to take these obligations seriously
                and abide by them.
                 The judgment prohibits us from establishing rules that restrict the
                ability of colleges to recruit early decision applicants, incoming
                freshmen, and transfer students. There are limited exceptions to this
                restriction. You must consult me before determining whether a
                particular recruiting rule is subject to an exception under the
                judgment.
                 A copy of the court order is attached. Please read it carefully and
                familiarize yourself with its terms. The judgment, rather than the
                above description, is controlling. If you have any questions about the
                judgment or how it affects your activities, please contact me as soon
                as possible.
                 Thank you for your cooperation.
                Sincerely,
                [Defendant's Antitrust Compliance Officer]
                Exhibit 2
                 Please take notice that National Association for College Admission
                Counseling (``NACAC'') has entered into a settlement with the United
                States Department of Justice relating to its rulemaking practices.
                 On December 12th, 2019, the United States filed a federal civil
                antitrust Complaint alleging that NACAC established rules that
                restricted its members' ability to recruit college applicants and
                transfer students in violation of Section 1 of the Sherman Act, 15
                U.S.C. 1. At the same time, the United States filed a proposed
                settlement that prohibits NACAC from entering into, maintaining, or
                enforcing such rules.
                 As part of its settlement with the United States, NACAC confirmed
                that it has withdrawn any offending rule already in place.
                 The Final Judgment, which was recently entered by a federal
                district court, is effective for seven years. Copies of the Complaint,
                Final Judgment, and Competitive Impact Statement are available at:
                [Link to Complaint]
                [Link to Final Judgment]
                [Link to Competitive Impact Statement]
                United States District Court for the District of Columbia
                 United States of America, Plaintiff, v. National Association for
                College Admission Counseling, Defendant.
                Competitive Impact Statement
                 Plaintiff United States of America (``United States''), pursuant to
                Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or
                ``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact
                Statement relating to the proposed Final Judgment submitted for entry
                in this civil antitrust proceeding.
                I. Nature and Purpose of the Proceeding
                 On December 12, 2019, the United States filed a civil antitrust
                Complaint alleging that Defendant National Association for College
                Admission Counseling (``NACAC'') enacted certain mandatory rules
                (collectively referred to as the ``Recruiting Rules'') that unlawfully
                limited competition between its members in violation of Section 1 of
                the Sherman Act, 15 U.S.C. Sec. 1.
                 NACAC members include colleges and their admissions personnel and
                high schools and their guidance counselors. NACAC's college members
                compete with each other for college students, both college applicants
                and potential transfer students. Colleges compete on a number of
                different dimensions, including tuition cost, majors offered, ease and
                cost of application, campus amenities, quality of education, reputation
                of the institution, and prospects for employment following graduation.
                The Complaint, however, alleges that NACAC, through its rulemaking
                authority, established three mandatory rules that limited the manner in
                which its college members could compete for college applicants and
                potential transfer students.
                 The first rule, the Transfer Student Recruiting Rule, expressly
                prevented colleges from affirmatively recruiting potential transfer
                students from other schools. The second rule, the Early Decision
                Incentives Rule, forbade colleges from offering incentives, financial
                or otherwise, to Early Decision applicants. The third rule, the First-
                Year Undergraduate Recruiting Rule, limited the ability of colleges to
                recruit incoming first-year students after May 1. These three rules--
                collectively ``the Recruiting Rules''--were not reasonably necessary to
                any separate, legitimate business transaction or collaboration among
                NACAC and its members. According to the Complaint, the Defendant's
                Recruiting Rules unlawfully restricted competition between NACAC's
                members and were unreasonable restraints of trade that violated Section
                1 of the Sherman Act, 15 U.S.C. Sec. 1.
                [[Page 1335]]
                 At the same time the Complaint was filed, the United States filed a
                Stipulation and Order and proposed Final Judgment, which would remedy
                the violation by enjoining the Defendant from enacting, maintaining, or
                enforcing the Recruiting Rules, subject to limited exceptions.
                 NACAC members voted in September of 2019 to repeal the Recruiting
                Rules, effective as of that time, and the Final Judgment seeks to
                prevent NACAC from re-imposing those or any similar rules. The proposed
                Final Judgment also requires NACAC to take specific compliance measures
                and to cooperate in any investigation or litigation examining whether
                or alleging that NACAC enacted a Recruiting Rule or any similar rule in
                violation of Section 1 of the Sherman Act, 15 U.S.C. Sec. 1.
                 The United States and NACAC have stipulated that the proposed Final
                Judgment may be entered after compliance with the APPA. Entry of the
                proposed Final Judgment would terminate this action, except that the
                Court would retain jurisdiction to construe, modify, or enforce the
                provisions of the proposed Final Judgment and to punish violations
                thereof.
                II. Description of the Events Giving Rise to the Alleged Violation
                A. The Defendant
                 NACAC is a nonstock corporation organized in the State of Delaware
                and headquartered in Arlington, Virginia. Beyond establishing ethics
                rules that govern its members, NACAC holds dozens of college fairs that
                allow prospective students to interact with a number of regional and
                national colleges.
                B. Defendant-Established Anticompetitive Recruiting Rules
                 The Complaint alleges that NACAC, through the version of its Code
                of Ethics and Professional Practices (``CEPP'' or ``Ethics Rules'')
                that was effective during and prior to 2018, established three rules
                that unreasonably restrained competition between its member colleges
                for college applicants and potential transfer students. These rules,
                described in more detail below, were voted on by NACAC's members and
                were mandatory not only for NACAC's members but also for any non-
                members that participated in NACAC's college fairs. Failure to abide by
                the rules embodied in the CEPP could have resulted in disciplinary
                actions by NACAC, including but not limited to exclusion from its
                college fairs or expulsion from NACAC.
                1. Transfer Student Recruiting Rule
                 The first rule at issue is the Transfer Student Recruiting Rule,
                originally embodied at Section II.D.5 of the CEPP. That rule provided
                that:
                 Colleges must not solicit transfer applications from a previous
                year's applicant or prospect pool unless the students have
                themselves initiated a transfer inquiry or the college has verified
                prior to contacting the students that they are either enrolled at a
                college that allows transfer recruitment from other colleges or are
                not currently enrolled in a college.
                 As described in the Complaint, this rule acted as a substantial
                impediment to competition between colleges for potential transfer
                students, and provided only limited exceptions that allowed for
                transfer recruitment. Absent this restriction, colleges will be free to
                recruit potential transfer students more aggressively, which will lead
                to colleges to making more attractive offers, like lower tuition costs
                or higher quality admissions packages.
                2. Early Decision Incentives Rule
                 The second rule at issue is the Early Decision Incentives Rule,
                which was at Section II.A.3.a.vi of the CEPP. This rule stated that:
                 Colleges must not offer incentives exclusive to students
                applying or admitted under an Early Decision application plan.
                Examples of incentives include the promise of special housing,
                enhanced financial aid packages, and special scholarships for Early
                Decision admits. Colleges may, however, disclose how admission rates
                for Early Decision differ from those for other admission plans.
                 This rule, as alleged in the Complaint, unreasonably limited the
                competition for Early Decision applicants. In the current admissions
                ecosystem, some colleges allow students to apply via Early Decision,
                which provides students with an accelerated decision on admission to
                that school but also requires from the student a binding commitment to
                attend if admitted. The Early Decision Incentives Rule forbade colleges
                from offering incentives (beyond the accelerated decision) to those
                students. This was an unreasonable restraint on competition. Absent
                this restriction, colleges will be free to offer a set of incentives
                for Early Decision applicants that best serves the college and its
                applicant base, including special scholarships, preferred housing, or
                other discounts on tuition. Over time, this will lead to more
                aggressive recruitment of students through more attractive offers of
                admission.
                3. First-Year Undergraduate Recruiting Rule
                 The final rule at issue is the First-Year Undergraduate Recruiting
                Rule, which was at Section II.B.5 of the CEPP. This rule required that:
                 Colleges will not knowingly recruit or offer enrollment
                incentives to students who are already enrolled, registered, have
                declared their intent, or submitted contractual deposits to other
                institutions. May 1 is the point at which commitments to enroll
                become final, and colleges must respect that. The recognized
                exceptions are when students are admitted from a wait list, students
                initiate inquiries themselves, or cooperation is sought by
                institutions that provide transfer programs. These statements
                capture the spirit and intent of this requirement:
                 a. Whether before or after May 1, colleges may at any time
                respond to a student- initiated request to reconsider an offer or
                reinstate an application.
                 b. Once students have declined an offer of admission, colleges
                may no longer offer them incentives to change or revisit their
                college decision. Before May 1, however, colleges may ask whether
                candidates would like a review of their financial aid package or
                other incentives before their admission is canceled, so long as the
                question is asked at the time that the admitted students first
                notify them of their intent to cancel their admission.
                 c. After May 1, colleges may contact students who have neither
                deposited nor withdrawn their applications to let them know that
                they have not received a response from them. Colleges may neither
                offer nor imply additional financial aid or other incentives unless
                students have affirmed that they have not deposited elsewhere and
                are still interested in discussing fall enrollment.
                 This rule imposed several limits on the ability of colleges to
                recruit incoming first-year students. First, it prevented colleges from
                recruiting students who the colleges knew had declared their intent,
                through making a deposit or otherwise, to attend another institution.
                Second, it prevented colleges from offering incentives to students who
                had declined an offer of admission (with the limited exception set
                forth in II.B.5.b. of the CEPP). Third, it limited the ability of
                colleges, after May 1, to recruit students who had neither made a
                deposit nor withdrawn their application.
                 The First-Year Undergraduate Recruiting Rule imposed significant
                restrictions on competition between colleges for first-year students.
                It limited the ability of colleges to continue to compete for students
                who had declined an offer of admission and significantly restricted the
                ability of colleges to compete for students after May 1. Absent these
                restrictions, colleges will be free to offer more aggressive financial
                aid packages or other inducements to students to entice them to enroll.
                Due to
                [[Page 1336]]
                this enhanced competition, students will receive more attractive offers
                of admission.
                C. NACAC's Recruiting Rules Were Unlawful Agreements Under Section 1 of
                the Sherman Act
                 Horizontal restraints that are not reasonably necessary to any
                separate, legitimate business transaction or collaboration are unlawful
                under Section 1 of the Sherman Act. Section 1 outlaws any ``contract,
                combination . . . , or conspiracy, in restraint of trade or commerce.''
                15 U.S.C. 1. Courts have long interpreted this language to prohibit
                only ``unreasonable'' restraints of trade. Bus. Elecs. Corp. v. Sharp
                Elecs. Corp., 485 U.S. 717, 723 (1988). Courts have consistently found
                that trade association rules are no different than horizontal
                agreements entered into between the association's members. For example,
                in National Society of Professional Engineers v. United States, 435
                U.S. 679 (1978), the Supreme Court upheld a challenge to a trade
                association's ban on competitive bidding as a horizontal agreement
                between its members. Other Supreme Court precedent is consistent with
                this outcome.\1\ Additionally, when a trade association works to
                enforce a stated policy, it faces ``more rigorous antitrust scrutiny.''
                Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501 n.6
                (1988) (citing Radiant Burners, Inc. v. Peoples Gas Light & Coke Co.,
                364 U.S. 656 (1961); Fashion Originators' Guild of America, Inc. v.
                FTC, 312 U.S. 457 (1941)).
                ---------------------------------------------------------------------------
                 \1\ See, generally, Fed. Trade Comm'n v. Indiana Fed'n of
                Dentists, 476 U.S. 447 (1986); California Dental Ass'n v. Fed. Trade
                Comm'n, 526 U.S. 756 (1999).
                ---------------------------------------------------------------------------
                 The United States has historically challenged the actions of trade
                associations or other membership organizations where they advance
                unreasonable restraints among their memberships. In addition to the
                Professional Engineers case cited above, on June 27, 1995, the United
                States challenged several accreditation practices of the American Bar
                Association as violative of Section 1.\2\ The United States has also
                challenged association rules in the chiropractic,\3\ nursing,\4\ and
                realty \5\ industries, among others.
                ---------------------------------------------------------------------------
                 \2\ Complaint, United States v. American Bar Association, No.
                95-cv-1211 (D.D.C. June 27, 1995).
                 \3\ Complaint, United States v. Oklahoma State Chiropractic
                Independent Physicians Association, No 13-CV-21-TCK-TLW (N.D. Okla.
                January 10, 2013).
                 \4\ Complaint, United States v. Arizona Hospital and Healthcare
                Association, No. CV07-1030-PHX (D.Ariz. May 22, 2007).
                 \5\ Complaint, United States v. National Association of
                Realtors, No. 05C-5140 (N.D. Ill. Sept. 8, 2005).
                ---------------------------------------------------------------------------
                 As described in the Complaint, NACAC's Recruiting Rules were
                horizontal agreements restricting competition between colleges for
                college applicants and potential transfer students. The Recruiting
                Rules suppressed and eliminated competition to the detriment of college
                applicants and potential transfer students by restraining the ability
                of NACAC's college members to recruit them. They were not reasonably
                necessary to achieve the otherwise market-enhancing rules contained in
                the CEPP. Accordingly, they were unlawful agreements under Section 1 of
                the Sherman Act.
                III. Explanation of the Proposed Final Judgment
                 The proposed Final Judgment sets forth (1) conduct in which the
                Defendant may not engage; (2) certain actions the Defendant is required
                to take to ensure compliance with the terms of the proposed Final
                Judgment; (3) the Defendant's obligations to cooperate with the United
                States in its investigations of the promulgation of any future rules
                similar to the Recruiting Rules; and (4) oversight procedures the
                United States may use to ensure compliance with the proposed Final
                Judgment.
                A. Prohibited Conduct
                 Section IV of the proposed Final Judgment prevents the Defendant
                from establishing, maintaining, or enforcing any ``Transfer Student
                Recruiting Rule,'' ``Early Decision Incentives Rule,'' or ``First-Year
                Undergraduate Recruiting Rule'' or any similar rules. The proposed
                Final Judgment defines each of those terms in Section II, and the
                definitions are intended to correspond with the rules described in
                Section II.B of this Competitive Impact Statement.
                 Furthermore, Section IV of the proposed Final Judgment requires
                that the Defendant abolish any ``Transfer Student Recruiting Rule,''
                ``Early Decision Incentives Rule,'' or ``First-Year Undergraduate
                Recruiting Rule'' currently within its ethics rules.
                B. Required Conduct
                 Section VI of the proposed Final Judgment sets forth various
                mandatory procedures to ensure the Defendant's compliance with the
                proposed Final Judgment, including a requirement to provide officers,
                directors, and management with copies of the proposed Final Judgment
                and annual briefings about its terms. Additionally, Section VI requires
                the Defendant to provide notice to its members about this action that
                includes a description of the terms of the proposed Final Judgment, the
                Competitive Impact Statement, and the Complaint. Finally, Section VI
                requires the Defendant's Antitrust Compliance Officer to promptly
                notify the United States upon receipt of any complaint that the terms
                of the proposed Final Judgment have been violated.
                C. Compliance
                 To facilitate monitoring of the Defendant's compliance with the
                proposed Final Judgment, Section VII permits the United States, upon
                reasonable notice and a written request:
                 (1) Access during the Defendant's office hours to inspect and copy,
                or at the option of the United States, to require the Defendant to
                provide electronic or hard copies of, all books, ledgers, accounts,
                records, data, and documents in the possession, custody, or control of
                the Defendant, relating to any matters contained in the proposed Final
                Judgment; and (2) to interview, either informally or on the record, the
                Defendant's officers, employees, or agents.
                 Additionally, Section VII requires the Defendant, upon written
                request of the United States, to submit written reports or responses to
                interrogatories relating to any of the matters contained in the
                proposed Final Judgment.
                D. Enforcement and Expiration of the Final Judgment
                 The proposed Final Judgment contains provisions designed to promote
                compliance and make the enforcement of the Final Judgment as effective
                as possible. Paragraph IX(A) provides that the United States retains
                and reserves all rights to enforce the provisions of the proposed Final
                Judgment, including its rights to seek an order of contempt from the
                Court. Under the terms of this paragraph, the Defendant has agreed that
                in any civil contempt action, any motion to show cause, or any similar
                action brought by the United States regarding an alleged violation of
                the Final Judgment, the United States may establish the violation and
                the appropriateness of any remedy by a preponderance of the evidence
                and that the Defendant has waived any argument that a different
                standard of proof should apply. This provision aligns the standard for
                compliance obligations
                [[Page 1337]]
                with the standard of proof that applies to the underlying offense that
                the compliance commitments address.
                 Paragraph IX(B) provides additional clarification regarding the
                interpretation of the provisions of the proposed Final Judgment. The
                proposed Final Judgment was drafted to restore the competition the
                United States alleged was harmed by the Defendant's challenged conduct.
                The Defendant agrees that it will abide by the proposed Final Judgment,
                and that it may be held in contempt of this Court for failing to comply
                with any provision of the proposed Final Judgment that is stated
                specifically and in reasonable detail, as interpreted in light of this
                procompetitive purpose.
                 Paragraph IX(C) of the proposed Final Judgment provides that if the
                Court finds in an enforcement proceeding that the Defendant has
                violated the Final Judgment, the United States may apply to the Court
                for a one-time extension of the Final Judgment, together with such
                other relief as may be appropriate. In addition, to compensate American
                taxpayers for any costs associated with investigating and enforcing
                violations of the proposed Final Judgment, Paragraph IX(C) provides
                that, in any successful effort by the United States to enforce the
                Final Judgment against the Defendant, whether litigated or resolved
                before litigation, that the Defendant will reimburse the United States
                for attorneys' fees, experts' fees, and other costs incurred in
                connection with any enforcement effort, including the investigation of
                the potential violation.
                 Paragraph IX(D) states that the United States may file an action
                against the Defendant for violating the Final Judgment for up to four
                years after the Final Judgment has expired or been terminated. This
                provision is meant to address circumstances such as when evidence that
                a violation of the Final Judgment occurred during the term of the Final
                Judgment is not discovered until after the Final Judgment has expired
                or been terminated or when there is not sufficient time for the United
                States to complete an investigation of an alleged violation until after
                the Final Judgment has expired or been terminated. This provision,
                therefore, makes clear that, for four years after the Final Judgment
                has expired or been terminated, the United States may still challenge a
                violation that occurred during the term of the Final Judgment.
                 Finally, Section X of the proposed Final Judgment provides that the
                Final Judgment will expire seven years from the date of its entry,
                except that after five years from the date of its entry, the Final
                Judgment may be terminated upon notice by the United States to the
                Court and the Defendant that the continuation of the Final Judgment is
                no longer necessary or in the public interest.
                IV. Remedies Available to Potential Private Litigants
                 Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
                person who has been injured as a result of conduct prohibited by the
                antitrust laws may bring suit in federal court to recover three times
                the damages the person has suffered, as well as costs and reasonable
                attorneys' fees. Entry of the proposed Final Judgment neither impairs
                nor assists the bringing of any private antitrust damage action. Under
                the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the
                proposed Final Judgment has no prima facie effect in any subsequent
                private lawsuit that may be brought against the Defendant.
                V. Procedures Available for Modification of the Proposed Final Judgment
                 The United States and the Defendant have stipulated that the
                proposed Final Judgment may be entered by the Court after compliance
                with the provisions of the APPA, provided that the United States has
                not withdrawn its consent. The APPA conditions entry upon the Court's
                determination that the proposed Final Judgment is in the public
                interest.
                 The APPA provides a period of at least 60 days preceding the
                effective date of the proposed Final Judgment within which any person
                may submit to the United States written comments regarding the proposed
                Final Judgment. Any person who wishes to comment should do so within 60
                days of the date of publication of this Competitive Impact Statement in
                the Federal Register, or the last date of publication in a newspaper of
                the summary of this Competitive Impact Statement, whichever is later.
                All comments received during this period will be considered by the U.S.
                Department of Justice, which remains free to withdraw its consent to
                the proposed Final Judgment at any time before the Court's entry of the
                Final Judgment. The comments and the response of the United States will
                be filed with the Court. In addition, comments will be posted on the
                U.S. Department of Justice, Antitrust Division's internet website and,
                under certain circumstances, published in the Federal Register.
                 Written comments should be submitted to: Chief, Technology and
                Financial Services Section Antitrust Division, United States Department
                of Justice, 450 Fifth Street NW, Suite 7100, Washington, DC 20530.
                 The proposed Final Judgment provides that the Court retains
                jurisdiction over this action, and the parties may apply to the Court
                for any order necessary or appropriate for the modification,
                interpretation, or enforcement of the Final Judgment.
                VI. Alternatives to the Proposed Final Judgment
                 The United States considered, as an alternative to the proposed
                Final Judgment, a full trial on the merits against NACAC. The United
                States could have continued the litigation and sought preliminary and
                permanent injunctions against NACAC. The United States is satisfied,
                however, that the requirements of the proposed Final Judgment will
                preserve competition among colleges for the provision of college
                services to college applicants and potential transfer students in the
                United States. Thus, the proposed Final Judgment achieves all or
                substantially all of the relief the United States would have obtained
                through litigation, but avoids the time, expense, and uncertainty of a
                full trial on the merits of the Complaint.
                VII. Standard of Review Under the APPA for the Proposed Final Judgment
                 The Clayton Act, as amended by the APPA, requires that proposed
                consent judgments in antitrust cases brought by the United States be
                subject to a 60-day comment period, after which the Court shall
                determine whether entry of the proposed Final Judgment ``is in the
                public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
                the Court, in accordance with the statute as amended in 2004, is
                required to consider:
                 (A) the competitive impact of such judgment, including
                termination of alleged violations, provisions for enforcement and
                modification, duration of relief sought, anticipated effects of
                alternative remedies actually considered, whether its terms are
                ambiguous, and any other competitive considerations bearing upon the
                adequacy of such judgment that the court deems necessary to a
                determination of whether the consent judgment is in the public
                interest; and
                 (B) the impact of entry of such judgment upon competition in the
                relevant market or markets, upon the public generally and
                individuals alleging specific injury from the violations set forth
                in the complaint including consideration of the public benefit, if
                any, to be derived from a determination of the issues at trial.
                 15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory
                factors, the Court's inquiry is necessarily a limited one as the
                government is entitled to
                [[Page 1338]]
                ``broad discretion to settle with the defendant within the reaches of
                the public interest.'' United States v. Microsoft Corp., 56 F.3d 1448,
                1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp., Inc., 38 F.
                Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the ``court's inquiry is
                limited'' in Tunney Act settlements); United States v. InBev N.V./S.A.,
                No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11,
                2009) (noting that a court's review of a consent judgment is limited
                and only inquires ``into whether the government's determination that
                the proposed remedies will cure the antitrust violations alleged in the
                complaint was reasonable, and whether the mechanism to enforce the
                final judgment are clear and manageable'').
                 As the U.S. Court of Appeals for the District of Columbia Circuit
                has held, under the APPA a court considers, among other things, the
                relationship between the remedy secured and the specific allegations in
                the government's complaint, whether the proposed Final Judgment is
                sufficiently clear, whether its enforcement mechanisms are sufficient,
                and whether it may positively harm third parties. See Microsoft, 56
                F.3d at 1458-62. With respect to the adequacy of the relief secured by
                the proposed Final Judgment, a court may ``not to make de novo
                determination of facts and issues.'' United States v. W. Elec. Co., 993
                F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also
                Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.
                Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F.
                Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at
                *3. Instead, ``[t]he balancing of competing social and political
                interests affected by a proposed antitrust consent decree must be left,
                in the first instance, to the discretion of the Attorney General.'' W.
                Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court
                should bear in mind the flexibility of the public interest inquiry: the
                court's function is not to determine whether the resulting array of
                rights and liabilities is one that will best serve society, but only to
                confirm that the resulting settlement is within the reaches of the
                public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
                omitted). More demanding requirements would ``have enormous practical
                consequences for the government's ability to negotiate future
                settlements,'' contrary to congressional intent. Id. at 1456. ``The
                Tunney Act was not intended to create a disincentive to the use of the
                consent decree.'' Id.
                 The United States' predictions about the efficacy of the remedy are
                to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
                1461 (recognizing courts should give ``due respect to the Justice
                Department's . . . view of the nature of its case''); United States v.
                Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
                evaluating objections to settlement agreements under the Tunney Act, a
                court must be mindful that [t]he government need not prove that the
                settlements will perfectly remedy the alleged antitrust harms[;] it
                need only provide a factual basis for concluding that the settlements
                are reasonably adequate remedies for the alleged harms.'') (internal
                citations omitted); United States v. Republic Servs., Inc., 723 F.
                Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
                which the government's proposed remedy is accorded''); United States v.
                Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
                district court must accord due respect to the government's prediction
                as to the effect of proposed remedies, its perception of the market
                structure, and its view of the nature of the case''). The ultimate
                question is whether ``the remedies [obtained by the Final Judgment are]
                so inconsonant with the allegations charged as to fall outside of the
                `reaches of the public interest.' '' Microsoft, 56 F.3d at 1461
                (quoting W. Elec. Co., 900 F.2d at 309).
                 Moreover, the Court's role under the APPA is limited to reviewing
                the remedy in relationship to the violations that the United States has
                alleged in its complaint, and does not authorize the Court to
                ``construct [its] own hypothetical case and then evaluate the decree
                against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways,
                38 F. Supp. 3d at 75 (noting that the court must simply determine
                whether there is a factual foundation for the government's decisions
                such that its conclusions regarding the proposed settlements are
                reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public
                interest' is not to be measured by comparing the violations alleged in
                the complaint against those the court believes could have, or even
                should have, been alleged''). Because the ``court's authority to review
                the decree depends entirely on the government's exercising its
                prosecutorial discretion by bringing a case in the first place,'' it
                follows that ``the court is only authorized to review the decree
                itself,'' and not to ``effectively redraft the complaint'' to inquire
                into other matters that the United States did not pursue. Microsoft, 56
                F.3d at 1459-60.
                 In its 2004 amendments to the APPA, Congress made clear its intent
                to preserve the practical benefits of using consent judgments proposed
                by the United States in antitrust enforcement, Public Law 108-237 Sec.
                221, and added the unambiguous instruction that ``[n]othing in this
                section shall be construed to require the court to conduct an
                evidentiary hearing or to require the court to permit anyone to
                intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d
                at 76 (indicating that a court is not required to hold an evidentiary
                hearing or to permit intervenors as part of its review under the Tunney
                Act). This language explicitly wrote into the statute what Congress
                intended when it first enacted the Tunney Act in 1974. As Senator
                Tunney explained: ``[t]he court is nowhere compelled to go to trial or
                to engage in extended proceedings which might have the effect of
                vitiating the benefits of prompt and less costly settlement through the
                consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of
                Sen. Tunney). ``A court can make its public interest determination
                based on the competitive impact statement and response to public
                comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova
                Corp., 107 F. Supp. 2d at 1
                VIII. Determinative Documents
                 There are no determinative materials or documents within the
                meaning of the APPA that were considered by the United States in
                formulating the proposed Final Judgment.
                Dated: December 20, 2019
                Respectfully submitted,
                -----------------------------------------------------------------------
                Ryan Struve,
                United States Department of Justice, Antitrust Division, Technology and
                Financial Services Section, 450 Fifth Street NW, Suite 7100,
                Washington, DC 20530, Telephone: (202) 514-4890, Email:
                [email protected].
                [FR Doc. 2020-00213 Filed 1-9-20; 8:45 am]
                 BILLING CODE 4410-11-P
                

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