The Department of Justice (DOJ) is reviewing Intuit’s recent attempt to acquire Credit Karma over anticompetitive concerns.
Intuit moved to purchase Credit Karma for roughly $7 billion in cash and stocks. While the deal appears to join two complimentary services on the surface, almost immediately it came under scrutiny over concerns Intuit was merely trying to eliminate a competitor. While Credit Karma is primarily known for helping individuals monitor and improve their credit score, it had launched a free tax preparation service in 2017.
ProPublica is reporting the concerns were valid enough to warrant the DOJ’s attention. In particular, Credit Karma’s innovative approach to tax preparation threatened to upend the whole market. In a company memo ProPublica obtained that outlined Intuit’s legal strategy, it appears the government is looking at “the influence that Intuit’s purchase of Credit Karma will have on consumer tax preparation platforms and [the] software market.”
Once Credit Karma and Intuit respond to the government’s request for information, the DOJ will decide what to do. While it’s too early to tell which way the DOJ will rule, given the government’s renewed interest in anticompetitive behavior in the tech industry, Intuit’s deal may face significant hurdles.
