DoJ makes fintech giant sell Credit Karma’s tax wing to Square before $7.1B acquisition
Intuit, which also owns TurboTax, is not allowed to control all consumer tax software, says DoJ.
Per an announcement and series of filings on Wednesday, the United States Department of Justice is calling shenanigans on Intuit’s ambitions, at least in part.
Intuit owns a stable of user-facing finance software, including budgeting app Mint, digital do-it-yourself tax software TurboTax and QuickBooks, for business accounting. The firm initially announced its acquisition of Credit Karma back in February. By its own account, Intuit was paying $7.1 billion.
In its antitrust case released today, the DoJ does not object to the bulk of the new acquisition but has mandated that Intuit divest from Credit Karma’s tax business, which it says is a top competitor to TurboTax. In its complaint, the DoJ writes:
“In 2020, approximately 41 million individuals filed a federal tax return using Intuit’s TurboTax, accounting for about 66% of the total market for DDIY tax preparation products. During the same time period, approximately two million individuals filed a federal tax return using Credit Karma’s DDIY tax preparation product, accounting for about 3% of the total market.”
How much Square will be paying for Credit Karma’s tax business remains unknown. The DoJ also noted that the business is a unique threat to TurboTax because it offers its services for free.
Square, for its part, also runs CashApp, which is increasingly involved in Bitcoin. Intuit, on the other hand, drew criticism from crypto guru Andreas Antonopoulos last year. Antonopoulos alleged that Intuit blocked his credit card payments on the firm’s accounting services due to his use of crypto.
Earlier this month, the DoJ filed another antitrust suit in payments against Visa’s attempt to acquire Plaid.
