The U.S. Department of Justice on Jan. 11 closed an investigation into whether GDS and seven other D.C.-area private schools violated federal antitrust law in their concurrent, ongoing removal of Advanced Placement courses. The inquiry was prompted by a June 2018 Washington Post op-ed authored by GDS Head of School Russell Shaw and his counterparts announcing their shared goal, former Assistant Attorney General Makan Delrahim told the Bit.
In the view of Justice Department antitrust investigators, a joint decision by the schools might stifle competition for students looking to take APs. But the civil investigation did not result in prosecution or a settlement, and GDS maintains it never broke the law.
“Moving away from AP courses will allow us to offer courses that are foundational, allow for authentic engagement with the world and demonstrate respect for students’ intellectual curiosity and interests,” the heads of GDS, Holton-Arms, Landon, Maret, National Cathedral, Potomac, St. Albans and Sidwell Friends wrote in the op-ed. “What is unusual about our decision is that we came to this conclusion together and are announcing it jointly.”
The Justice Department press release announcing the investigation’s close called its decision “a matter of prosecutorial discretion” and left unanswered the question of the schools’ actions’ legality. Delrahim, who led the antitrust division during the Trump administration, said in the statement, “I am pleased that the Schools have disavowed any anticompetitive agreement to coordinate on their offerings to students.”
Howard Shelanski, a law professor at Georgetown University and leading antitrust expert, suggested that it is uncommon for the Justice Department to investigate educational institutions, particularly private high schools. In all areas, it has to pick and choose what investigations to pursue. “A DOJ investigation is therefore a serious matter that comes with potentially high costs for both parties,” Shelanski said, in time and resources.
According to High School Principal Katie Gibson, GDS began planning to phase out AP courses close to 20 years ago. “I found papers going back to the early ’90s where we were talking about it,” Gibson said.
Shaw said that before writing the Post op-ed, he and the other school heads had only discussed and shared research about the benefits of leaving APs behind. GDS administrators had reached out to colleges across the country asking whether an absence of AP designations on transcripts would hurt students’ chances of admission. They shared the responses—mostly nos—with the other schools.
“The thought was,” Shaw said, “we’re all having these conversations in our respective schools; it might be powerful to say something about this collectively.” In the article, they committed to “eliminating AP courses from our curriculums entirely by 2022.”
Still, attorney Patrick Linehan of the law firm Steptoe & Johnson LLP, which represented GDS during the investigation, said the schools never entered into any binding agreement regarding a joint course of action but were merely agreeing on the value of phasing out APs.
Shortly after publishing the op-ed, Shaw received a voicemail from a member of the antitrust division informing him of the investigation. “I was surprised,” he said. “Our schools collaborate all the time. We collaborate through our sports leagues; I will talk to other heads when the weather is bad and we’re deciding on whether or not we’re going to need to call a snow day.”
Shaw and the other heads were asked to retrace the process leading up to the op-ed. “They were first asking schools for documents and emails. They then deposed each head of school,” Shaw said. “I had never imagined going down to the Department of Justice and sitting in a room and having lawyers and investigators ask me questions with a transcriptionist typing down all of my answers.”
According to Shaw, he only told a limited number of people, including members of the Board of Trustees, about the investigation while it was in progress. Once it was dropped in January, GDS informed the faculty and staff. The school has not told students or families that it was under investigation.
For Linehan, the heightened level of scrutiny of what he deemed “intellectual collaboration” is cause for concern. “If they’re going to go into the business of investigating cases like this,” Linehan said of Justice Department lawyers in an interview with the Bit, “they’re going to chill important informational exchange among educators in pursuit of best practices.”
Particularly blatant antitrust violations, called per se violations, can be proven based solely on the existence of an agreement that limits competition, without regard for the action’s real-world effects, Shelanski explained.
“Any type of agreement where it’s a jointly agreed upon course of action could become suspect under the antitrust laws,” Delrahim said in an interview. “It appeared to be that’s what was happening.”
For his part, Linehan said, “I don’t think the government had a shot in hell on showing that this was a per se violation.”
When it is not clear that agreements between entities are intrinsically anticompetitive, antitrust enforcers must satisfy the so-called rule of reason standard by proving that consumers are being harmed. “This case is unusual in that the costs and benefits of eliminating AP courses are highly disputable,” Shelanski said.
Whether the Justice Department would have had a case remains a matter of opinion and definition. Determining what the agreement consisted of and whether it restricted competition at the expense of students is key to distinguish lawful collaboration from collusion.
“The Antitrust Division’s investigation revealed that the Schools likely did agree to eliminate AP courses by 2022,” the Justice Department’s Jan. 11 statement said. “Each of the Schools has represented to the Antitrust Division, however, that they are not bound by, and will not enter in the future, any agreement with another non-affiliated school or schools relating to the elimination of AP courses.”
Shaw maintains that the investigation has not in any way impacted the plan to phase out APs, which is well underway at GDS.
“The Justice Department looked into whether we had violated the law and ultimately came to the conclusion, which we believe, that we did not,” said Shaw.
But the press release did not entirely absolve the schools. It attributed the conclusion of the investigation to prosecutorial discretion and “the burden on the Schools associated with the ongoing pandemic.”
“I have to believe that regardless of what DOJ is saying externally, there had to be views internally that this case was not a meritorious case,” Linehan said. “I very rarely have seen the DOJ drop a case where they thought there was a legal violation.”
Gibson, who was not directly involved, expressed skepticism about the two-and-a-half-year inquiry. “It seemed like an odd charge to begin with,” she said. “Why is this where we’re focusing our government’s energy?”
Shelanski suggested that there might be a political explanation: “The DOJ under the Trump administration seemed to have a particular interest in going after elite institutions.”
Delrahim was nominated by former President Trump less than three months into his term in office in 2017. Ending the investigation of GDS and the seven peer schools was one of Delrahim’s last acts at the helm of the Justice Department’s antitrust division. Delrahim tendered his resignation eight days later, just hours before President Biden’s inauguration.