Credit Karma & TurboTax - Takeover or Merger?
The Department of Justice is scrutinizing Silicon Valley giant Intuit’s $7 billion takeover attempt of Credit Karma, an upstart personal finance firm that became a competitor when it launched a free tax prep offering that challenges Intuit’s TurboTax product.
Government lawyers worry that allowing Intuit to snuff out a promising startup could harm American consumers seeking free tax prep options, according to a June memo from the company side that describes Intuit’s legal strategy, which was obtained by ProPublica.
An Intuit spokesman didn’t answer questions about the memo but said in a statement that: “By joining forces with Credit Karma, we plan to create a personalized financial assistant that will help consumers find the right financial products that put more money in their pockets. This is a benefit neither company could easily achieve on their own.”
Credit Karma is a distant threat to TurboTax’s dominance — the company filed 40 million returns last year — but the relative newcomer ranks as the fifth-largest provider of online tax filing and has been growing rapidly.
The timeline for the DOJ’s investigation is not clear. In Intuit’s most recent public statements, the company said it expects the deal to close in the second half of 2020.