The Department of Justice is reviewing TurboTax maker Intuit’s $7.1 billion purchase of its free competitor
Intuit’s $7.1 billion purchase of Credit Karma earlier this year is now subjected to review by the US Department of Justice. The department is concerned about possible antitrust issues if Intuit — owner of TurboTax, QuickBooks, and Mint — is allowed to take over a former rival that offered free tax preparation tools that were directly in competition with Intuit’s own offering, according to a report from ProPublica.
In a memo obtained by ProPublica, the DOJ’s lawyers are apparently concerned about “the influence that Intuit’s purchase of Credit Karma will have on consumer tax preparation platforms and [the] software market.” Currently, the DOJ has requested Intuit and Credit Karma provide more information before it rules on whether to allow the merger to go through.
Credit Karma was founded in 2007, and the company made its mark offering services like free credit checks. But in 2017, it made one of its biggest expansions yet, adding free tax filing to its list of services. That made it a potential threat to companies like Intuit, which controls roughly two-thirds of the tax preparation market and makes billions of dollars a year providing tax filing services to Americans.
TurboTax — and other major tax companies, like H&R Block — already offered free filing options for years thanks to the IRS’s Free File program, which promises free tax filing for anyone with an adjusted gross income of $69,000 or less. In exchange, the IRS promised it wouldn’t create its own free tax product.
But as earlier ProPublica reports have shown, Intuit, H&R Block, and other companies haven’t been particularly forthcoming about offering these programs to users. In order to offset losses from changes in the tax laws, TurboTax intentionally pushed low-income taxpayers toward its pricier products instead of the Free File version of its software.
Intuit was also caught hiding its Free File service from Google search results, pointing customers toward its standard “free” service instead, which almost always requires taxpayers to upgrade to a paid tier to submit their federal and state taxes. The IRS has recently started to fight back against such practices, amending the Free File program to prohibit hiding Free File services from search results and require clearer branding to highlight the Free File version of their software (as opposed to other “free” options). The IRS also eliminated the restriction against the organization making its own competing free filing software.
For its part, Intuit refuted the idea that the merger is about eliminating competition. In a statement provided to ProPublica, an Intuit spokesman commented that “this combination is not about tax,” and the company added, “We are confident in the clear consumer and competitive benefits of our combination and look forward to continued engagement with regulators.”
Intuit’s $7.1 billion purchase of Credit Karma earlier this year is now subjected to review by the US Department of Justice. The department is concerned about possible antitrust issues if Intuit — owner of TurboTax, QuickBooks, and Mint — is allowed to take over a former rival that offered free…
Recent Posts
- Researchers produce thinnest sheet of metal ever using a 100-year old Japanese technique — Goldene could pave way for super catalysts, ultra high density optical storage and much more
- A mystery Wear OS watch has just surfaced as the Pixel Watch 3 gets closer
- Quordle today – hints and answers for Friday, April 26 (game #823)
- NYT Strands today — hints, answers and spangram for Friday, April 26 (game #54)
- Sony’s PlayStation Portal handheld is back in stock at multiple retailers
Archives
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- December 2011