Justice Department Clears Intuit to Buy Credit Karma
By Peter Rudegeair
The Justice Department cleared Credit Karma Inc.'s pending $7.1
billion sale to TurboTax maker Intuit Inc. after the two companies
agreed to divest Credit Karma's burgeoning tax-preparation business
to satisfy antitrust concerns.
Under a proposed settlement filed in federal court in
Washington, D.C., Wednesday, Credit Karma and Intuit said they
would sell Credit Karma Tax to Square Inc., the
financial-technology company run by Twitter Inc. Chief Executive
Jack Dorsey. The Wall Street Journal reported last month that
Square was in talks to acquire the tax-prep business.
Square said it would pay $50 million in cash for Credit Karma
Tax, which entered the market in 2017 and helped more than two
million individuals file their 2020 taxes. Around 41 million people
used Intuit's TurboTax to file their 2020 taxes.
The Justice Department argued that Credit Karma's small but
growing tax-prep business, which charges no fees, provided a check
on Intuit's ability to increase the prices it charges for paid
versions of TurboTax and degrade the quality of free versions.
Allowing the two companies to move forward with the original
deal would "further cement TurboTax's dominance," the department
said in court papers.
Assistant Attorney General Makan Delrahim said in a news release
that the sale of Credit Karma Tax to Square "ensures that taxpayers
will continue to both benefit from this competition and benefit
from new innovative financial service offerings from both Intuit
The Justice Department has spent recent months more closely
scrutinizing deals in the financial and technology sectors. It
filed a lawsuit earlier this month seeking to stop Visa Inc.'s $5.3
billion deal to acquire Plaid Inc., a key player in the
Intuit CEO Sasan Goodarzi said in a news release that the
settlement "brings us one step closer to transforming personal
finance by making it simpler for consumers to find the right
financial products, put more money in their pockets, and provide
financial expertise and advice."
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
November 25, 2020 12:23 ET (17:23 GMT)
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