The College Board: A Case for Antitrust Enforcement Under Section 2 of the Sherman Act

President Biden has made antitrust enforcement a chief priority of his economic policy, dubbed “Bidenomics.” [1] Signing Executive Order 14036, better known as “The Executive Order on Promoting Competition in the American Economy,” President Biden has directed the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to take action towards reining in anti-competitive practices. This Executive Order (EO) includes more than 72 initiatives for multiple federal agencies, in what the Biden Administration hopes will “tackle some of the most pressing competition problems across our economy.” [2] As a direct result of this EO, the DOJ’s Antitrust Division filed a Section 2 Sherman Antitrust Act offense (the actions a company takes to attain or keep monopoly power[1] [2] ) against Google for allegedly “monopolizing multiple digital advertising technology products.” [3] This is the first time in over twenty years that the DOJ has brought a Section 2 Violation of the Sherman Act. [4] While the Biden Administration, DOJ, and FTC may be focused on curbing anti-competitive conduct in the technology sector, they may have overlooked a key yet recent contributor to monopolistic practices: the education sector, more specifically, the education testing non-profit: The College Board.

For years, critics of the College Board have criticized its monopoly on college admissions testing, including its Advanced Placement (AP) Exams and their effect on the broader United States high school education curriculum. [5] Currently, much of the peer-reviewed literature on this issue focuses on how the College Board has achieved an economic monopoly but fails to explain its violation of Antitrust statutes codified under United States Federal law. [6] In an attempt to fill this gap, it is argued that a prima facie case can be brought against the College Board on its business practices regarding the AP program, in violation of Section 2 of the Sherman Antitrust Act.

Federal Antitrust Law Applicability to The College Board

Much of the gap results from a lack of precedent on the applicability of Federal antitrust statutes to non-profit organizations. However, within the past few decades, the Supreme Court has ruled that “U.S. antitrust law generally does not distinguish between for-profit and nonprofit companies.” [7] In NCAA v. Board of Regents of the University of Oklahoma (1984), the Supreme Court rejected the claim made by the NCAA, which argued that non-profit organizations that have engaged in anticompetitive conduct were not subject to antitrust liability. Justice John Paul Stevens claimed, “it is nevertheless well settled that good motives will not validate an otherwise anticompetitive practice.” [8] More recently, the court further clarified its ruling in the University of Oklahoma (1984) in National Collegiate Athletic Association v. Alston (2021), that an organization’s non-profit status in its applicability to Federal Antitrust Law is irrelevant. Justice Neil Gorsuch delivered the unanimous decision of the court, noting the court’s regular dismissal of requests “from litigants seeking special dispensation from the Sherman Act on the ground that their restraints of trade serve uniquely important ‘social objectives’ beyond enhancing competition.” [9]

The College Board maintains its status as a 501(c)(3) non-profit organization. Its main priority is aiding students in “expand[ing] access to higher education.” [10] They offer services to support students in the pursuit of this significant ‘social objective’, which includes the Scholastic Aptitude Test (the SAT) and the Advanced Placement program (the AP Program). [11]

Before 2020, the SAT was the College Board’s most profitable service. Serving as a standardized measurement of college readiness, it was a key component of the college admissions process. [12] In 1959, a new competitor entered the market – the Iowa City-based American College Testing (ACT). [13] However, as universities have become less reliant on the SAT and ACT, the most successful service the College Board offers is now the Advanced Placement Program, making close to $500 million in 2022 alone. [14] With almost 40 classes offered, the AP program is exceptionally appealing to students for a variety of reasons. [15] First, it allows students to gain college credit based on the score they receive on the end-of-the-year cumulative exam, allowing them to save money on college tuition. [16] Second, the number of AP Classes on an applicant’s high school transcript is one of the “most heavily weighted measures college admissions officers use to evaluate applicants.” [17] This is a result of AP classes being weighted, resulting in the more AP classes a student takes, the higher their Grade Point Average (GPA), which further enhances their chances of admission into more competitive colleges. [18] Lastly, with over 23,000 high schools in the United States offering AP classes, with almost 80% of 15 million public high school students attending a school that offers at minimum 5 AP courses, and with almost 2.9 million students enrolled in at least one AP course, AP courses are readily accessible to millions of students across the United States. [19]

Explanation of Section 2 of the Sherman Act, the Offense of Monopolization, and Its Applicability to the College Board

Among the various antitrust statutes, the most relevant to the College Board is Section 2 of the Sherman Act (15 U.S. Code § 2), which focuses on “single-firm conduct—the actions a company takes to attain or keep monopoly power.”[3] [4]  [20] Section 2 creates three offenses under which a corporation, organization, or individual can be charged: Monopolization, Attempted Monopolization, and Conspiracy to Monopolize. [21] To analyze the practices of the College Board and their applicability to violations of the Sherman Act, I will be focusing on the offense of Monopolization and the subsequent case law regarding it.

The elements of monopolization, articulated in United States v. Grinnell Corporation (1966), require a) the possession of monopoly power in the relevant market and b) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” [22] When evaluating a firm’s monopoly of power, courts are required to evaluate a firm’s market share. [23]  This is typically proven in two ways: direct evidence and circumstantial evidence. [24]  Direct evidence requires explicit proof of “supracompetitive prices accompanied by evidence of restricted market output.” [25] However, this is usually very difficult for a plaintiff such as the DOJ or FTC to prove due to the lack of a definite standard demarcating what constitutes “competitive prices or outcome levels.” [26] The more common method is to prove monopoly power through circumstantial evidence, which requires proof of the “dimensions of the relevant market,” “proof of a sufficiently high market share within in [said] market,” and “proof of sufficiently high barriers to entry that would enable the defendant to control market supply.” [27] When evaluating an alleged monopolist’s market share through circumstantial evidence, courts do not find proof of “monopoly power” unless the alleged firm’s market power is over 50 percent. [28] However, in modern practice, firms with a market share between 50 percent to 70 percent meet the possession of monopoly power threshold when the firm also possesses barriers to entry and expansion within the relevant market. [29]  Firms found with market power over 70 percent tend to be automatically viewed as monopolies. [30]

In analyzing the first element, the plaintiff is required to define the alleged monopolist product’s “relevant market.” For example, in ​​United States v. E. I. du Pont de Nemours & Co., (1957), the Supreme Court rejected the DOJ’s argument that “cellophane” was the relevant market, instead arguing, that the relevant market was the broader market of “flexible packaging materials” as these materials could be substituted readily for cellophane. [31]

Regarding the first element, the College Board possesses monopoly power in the relevant market of College Admissions Standardized Testing. The SAT and ACT have become less prominent in evaluating applicants for college admission. [32] This is a direct result of schools becoming “test-optional” or “test-blind.” For example, the University of California system has adopted this “test-blind” approach, dropping its testing requirement entirely, with some schools, like Columbia University, only considering scores if they are submitted with an application. [33] With schools across the nation dropping this testing requirement, it is relevant to note that this practice is reserved exclusively for SAT and ACT exams. [34] For many institutions, AP exams are still evaluated and often serve as a direct replacement for SAT & ACT exams. [35] However, SAT scores can still be utilized for criteria regarding scholarships & merit aid awards at many institutions. [36] As the SAT and ACT’s relevant market was College Admissions Standardized Testing, it is reasonable to infer that the AP exam is also a part of this market. Under this logic, the relevant market for the AP program is college admissions standardized testing.

In proving a sufficiently high market share within the relevant market, an analysis of competitors must be undertaken. Assessing competitors to the AP program in the United States, many note that there are two: the International Baccalaureate (IB) program and Dual Enrollment Programs present at community colleges across the United States. However, when analyzing the Dual Enrollment program in its totality, it does not directly compete with the AP program and is, in fact, in an entirely different market than the AP program. As a result, there is only one competitor in the same market as the AP program: the International Baccalaureate program.

Similarly to the College Board, the IB program also seeks to “provide a world-class preparation for university.” [37] Like the AP program, students in the IB program can choose from over 56 classes to take in their high school career. [38] However, unlike the AP program, whose courses span only one year, some IB courses take place over two years, with a cumulative exam at the end of the class. [39]  Like the AP program, these classes can be weighted on a student’s transcript, increasing their GPA, and providing benefits during the college admissions process. [40] In the US, there are only 938 schools that offer the IB program. [41] In 2021, there were 167,540 students enrolled in IB courses in the United States. [42]

As aforementioned, there is one difference between Dual Enrollment and the AP and IB programs, placing the former in a separate market. Eighty percent of dually enrolled students in the United States are in high school and are concurrently enrolled. As these students are enrolled in dual-enrollment classes alongside the other classes, it complicates dual-enrollment programs as being viewed as a member of the same relevant market as the AP program. As articulated in United States v. E.I. du Pont de Nemours & Co. (1956), products in the same relevant market must be substitutable. [43] As these courses can be taken alongside AP or IB courses, they may not be inherently substitutable for AP or IB classes. While students can take dual-enrollment courses as opposed to AP or IB courses, it is not primarily to improve their chances of admission to a university; it is to apply credits, once at a university, to save money on tuition. [44] As the relevant market for dual enrollment is primarily college credit and placement, and not primarily for admission to a university, dual enrollment courses are not explicitly a replacement or substitute for AP or IB classes and therefore cannot be in the same relevant market as the AP program.

The last requirement to prove the College Board possesses monopoly power in the relevant market is “proof of sufficiently high barriers to entry that would enable the defendant to control market supply.” [45]. In Rebel Oil Co., Inc. v. Atlantic Richfield Co. (1995), the Ninth Circuit articulated five main types of entry barriers, two of which are “economies of scale” and “entrenched buyer preferences for established brands.” [46] Beginning in 2015, when the SAT & ACT were standard in evaluating applications for university admission, the SAT began to undercut the ACT’s bids, winning a huge contract in the state of Michigan “at a price that was $15.4 million less than ACT’s bid.” [47] As a result, this created an economy of scale and expanded their market share. Utilizing this same strategy, by 2018, they had secured more than “ten state contracts.” [48] Many members of the bid proposal committees “seemed convinced that the new SAT would better align with other programs their students already used, such as AP.” [49] Additionally, the College Board simultaneously created brand recognition, creating buyer preferences for products the College Board offered, such as the AP program, to complement the offerings of the SAT at the time.

Regarding the second element of monopolization, in U.S. v. Microsoft Corp (2001), the U.S. Court of Appeals for the D.C. Circuit established the rule of reason as the criterion for determining the second element of monopolization. [50] The rule-of-reason analysis, specifically the Microsoft rule-of-reason, utilizes a shifting burden framework, which requires the plaintiffs first to provide proof that the practice in question is “likely to have a significant anticompetitive effect in a relevant market.” [51] Following this claim, the burden of proof would switch to the defendants, to then provide for “whether there are any procompetitive justifications relating to the restraint.” [52]

In evaluating the first requirement, the sheer power of the College Board on both the college admissions process is massive. First, the SAT allowed the College Board to maintain a hold on the market of standardized testing in evaluating applicants for admission to universities across the United States. As aforementioned, as the SAT became less prevalent within this evaluation, the AP program (for all intents and purposes) replaced the SAT. The anti-competitive advantage is that competitors hoping to expand into the market – such as IB – or hoping to enter the market, face extreme difficulty doing so. Thus, the College Board is likely to have a significant anticompetitive effect with its ability to insert itself into schools, districts, and states, without any real competition from the IB program or potential new competitors entering the market.

In evaluating the second requirement, the College Board—the defendant in this case—is required to provide “a procompetitive justification” in what is called a “shifting burden framework.” [53] However, even these procompetitive justifications are difficult to come by and are “mainly unexplored.” [54] However, legal scholars have speculated as to what a procompetitive justification could look like. One such justification, dubbed the “Market Failure Approach,” would potentially allow “restraints of trade that increase consumer surplus” to be justified as pro-competitive. [55] However, many courts have articulated that this defense isn’t justifiable as Congress designed the Sherman Act as a “consumer welfare prescription,” with very limited case law on the success of Market Failure claims. [56] Additionally, as a firm begins to possess a monopoly in the market, most courts agree that this comes with detrimental effects on consumer welfare. [57] As the AP program possesses a substantially large share of its respective market, this share means the College Board unilaterally controls the market price for an AP exam. Although the College Board does not increase prices as a result of this market control, it is not necessary to prove Monopolization under the letter of the law, as firms who possess monopoly power do not need to exercise it for a monopoly to exist, meaning that even if the alleged monopolist did not contract market output or increase market prices, the offense –  in this case the monopoly the College Board perpetuates through the medium of the AP program –  still exists under the law. [58]

Edited by Sunny Fang

[1] The White House, “Bidenomics Is Working: The President’s Plan Grows the Economy from the Middle Out and Bottom Up—Not the Top Down,” The White House, June 28, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/28/bidenomics-is-working-the-presidents-plan-grows-the-economy-from-the-middle-out-and-bottom-up-not-the-top-down/.

[2] The White House, “FACT SHEET: Executive Order on Promoting Competition in the American Economy,” The White House, July 9, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/.

[3] “Office of Public Affairs | Justice Department Sues Google for Monopolizing Digital Advertising Technologies | United States Department of Justice,” January 24, 2023, https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies.

[4]  Eva Dou and Gerrit De Vynck, “In First Tech Antitrust Trial in Decades, DOJ Takes on Google,” Washington Post, September 10, 2023, https://www.washingtonpost.com/technology/2023/09/10/doj-google-antitrust-case-trial/

[5] Rachelle Peterson, “Corrupting the College Board,” n.d., 34.

[6] Richard P. Phelps, “Does College Board Deserve Public Subsidies?,” SSRN Scholarly Paper (Rochester, NY, August 29, 2018), https://doi.org/10.2139/ssrn.3331692.

[7] “Antitrust Watch Outs for Nonprofits in ESG Activities | Advisories,” Arnold & Porter, accessed November 4, 2023, https://www.arnoldporter.com/en/perspectives/advisories/2023/05/antitrust-non-profits-in-esg-activities.

[8]  “NCAA v. Board of Regents of University of Oklahoma, 468 U.S. 85 (1984),” Justia Law, n. Footnote 23, accessed November 4, 2023, https://supreme.justia.com/cases/federal/us/468/85/.

[9]  “National Collegiate Athletic Association. v. Alston, 594 U.S. ___ (2021),” Justia Law, accessed November 4, 2023, https://supreme.justia.com/cases/federal/us/594/20-512/.

[10] “About Our Organization | College Board,” accessed November 6, 2023, https://about.collegeboard.org/.

[11]  “College Board - SAT, AP, College Search and Admission Tools,” accessed November 26, 2023, https://www.collegeboard.org/.

[12] “What Is the SAT? | The Princeton Review,” accessed November 7, 2023, https://www.princetonreview.com/college/sat-information#.

[13] “The Forbes Investigation: How The SAT Failed America,” accessed November 6, 2023, https://www.forbes.com/sites/susanadams/2020/09/30/the-forbes-investigation-how-the-sat-failed-america/?sh=3d4a0ebb53b5.

[14] Dana Goldstein, “Why Is the College Board Pushing to Expand Advanced Placement?,” The New York Times, November 18, 2023, sec. U.S., https://www.nytimes.com/2023/11/18/us/college-board-ap-exams-courses.html.

[15] “The Forbes Investigation: How The SAT Failed America.”

[16] “Getting Credit and Placement – AP Students | College Board,” accessed November 6, 2023, https://apstudents.collegeboard.org/getting-credit-placement.

[17] “The Forbes Investigation: How The SAT Failed America.”

[18] Russell T. Warne, “Research on the Academic Benefits of the Advanced Placement Program: Taking Stock and Looking Forward,” SAGE Open 7, no. 1 (January 1, 2017): 5 para. 5, https://doi.org/10.1177/2158244016682996.

[19] “The Forbes Investigation: How The SAT Failed America”; Goldstein, “Why Is the College Board Pushing to Expand Advanced Placement?”

[20] “What You Need to Know About Section 2 of the Sherman Act,” American Economic Liberties Project, para. 5, accessed November 5, 2023, https://www.economicliberties.us/our-work/section2-explainer/.

[21]  Dale Collins, “Unilateral Conduct Offenses,” Antitrust Law, 2014, 5.

[22] Collins, 5.

[23] “Monopoly Power: Use, Proof, and Relationship to Anticompetitive Effects in Section 2 Cases, by Thomas J. Klotz,” n.d., n. Footnote 30. It is important to note that courts use the words “Monopoly Power” and “Market Power” interchangeably.

[24] Collins, “Unilateral Conduct Offenses,” 14.

[25] Collins, 14.

[26] Collins, 14.

[27] Collins, 15.

[28]  “Monopolization Defined,” Federal Trade Commission, June 11, 2013, chap. Market Power, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined.

[29] Collins, “Unilateral Conduct Offenses,” 16.

[30] Collins, 16.

[31] Collins, 12.

[32] Mary Churchill, “The SAT and ACT Are Less Important Than You Might Think,” accessed November 15, 2023, https://www.insidehighered.com/blogs/higher-ed-policy/sat-and-act-are-less-important-you-might-think.

[33]  “Freshman Requirements,” sec. Standardized Tests, accessed November 15, 2023, https://admission.universityofcalifornia.edu/counselors/preparing-freshman-students/freshman-requirements.html#; “Testing Policy | Columbia Undergraduate Admissions,” accessed November 23, 2023, https://undergrad.admissions.columbia.edu/apply/process/testing#.

[34]   “Freshman Requirements,” n. Explicitly states that only SAT&ACT scores will not be considered as a part of the application but leaves how AP exam scores will be evaluated intentionally vague.

[35] Dulcie Head, “How Colleges and Universities Use AP Exam Scores,” Compass Education Group (blog), January 1, 2023, https://www.compassprep.com/how-colleges-use-ap-scores/.

[36] “Scholarships for SAT and ACT Scores | Prep | The Princeton Review,” accessed November 15, 2023, https://www.princetonreview.com/college-advice/sat-act-scores-merit-scholarships#.

[37] “University Admission,” International Baccalaureate®, accessed November 23, 2023, https://www.ibo.org/university-admission/.

[38] “The Differences Between AP and IB,” US News & World Report, sec. Different Experiences in AP and IB Programs, accessed November 23, 2023,

//www.usnews.com/education/articles/the-differences-between-ap-and-ib.

[39] “What Is the IB Program? | BestColleges,” accessed December 2, 2023, https://www.bestcolleges.com/blog/ib-program/.

[40]  “What is the IB Program? | BestColleges.”

[41] “IB United States Statistics.”

[42] “National Data | Civil Rights Data,” sec. International Baccalaureate (IB) Enrollment, accessed November 23, 2023, https://ocrdata.ed.gov/profile/us?surveyYear=2020.

[43] Collins, “Unilateral Conduct Offenses,” 12.

[44] Catherine Gewertz, “Are Dual-Enrollment Programs Overpromising?,” Education Week, September 7, 2016, sec. Teaching & Learning, College & Workforce Readiness, https://www.edweek.org/teaching-learning/are-dual-enrollment-programs-overpromising/2016/09.

[45] Collins, “Unilateral Conduct Offenses,” 14.

[46] Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F. 3d 1421, secs. 2, A, 3 para. 3 (Court of Appeals, 9th Circuit 1993) 

[47] “The Forbes Investigation: How The SAT Failed America.”

[48] “The Forbes Investigation: How The SAT Failed America.”

[49]  Phelps, “Does College Board Deserve Public Subsidies?,” 20 para. 2.

[50] “General Standards for Exclusionary Conduct, by Karen L. Grimm,” n.d., sec. C. Microsoft and the Rule-of-Reason Framework.

[51] “General Standards for Exclusionary Conduct, by Karen L. Grimm,” 14 para. 1.

[52] “1. Elements of the Offense,” February 19, 2015, para. Per Se Rule, https://www.justice.gov/archives/jm/antitrust-resource-manual-1-attorney-generals-policy-statement; “General Standards for Exclusionary Conduct, by Karen L. Grimm,” 14, para. 1.

Note: While the Microsoft rule is the most cited approach to analyzing “the legality of single-firm conduct under section 2 of the Sherman Act,” it is important to note there are other tests which are used in evaluating monopolistic single-firm conduct under Section 2.

[53] Andrew I Gavil, “BURDEN OF PROOF IN U.S. ANTITRUST LAW,” n.d., 149, para. 3.

[54] John M. Newman, “Procompetitive Justifications in Antitrust Law,” SSRN Electronic Journal, 2017, 7, https://doi.org/10.2139/ssrn.3017846.

[55]  “Newman - 2017 - Procompetitive Justifications in Antitrust Law.Pdf,” 10, accessed November 28, 2023, https://www.law.nyu.edu/sites/default/files/upload_documents/John%20Newman.pdf.

[56] National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 US 85, sec. III (Supreme Court 1984).

[57] “Google Scholar Judgement,” para. 117, accessed November 28, 2023, https://scholar.google.com/scholar_case?case=6175968099923315390&q=decline+in+firms+in+market+leads+to+detrimental+consumer+welfare&hl=en&as_sdt=3,33#p107.

[58] Collins, “Unilateral Conduct Offenses,” 15.