Intuit’s TurboTax announced on Monday, March 2, that it is buying personal finance website Credit Karmafor about US$7.1 billion in cash and stock, according to PYMNTS.
The Silicon Valley-based Credit Karma, which was founded in 2007, stated it has in excess of 100 million users, about twice as many as Intuit. The FinTech startup offers free credit scores, credit card applications, loans, and savings accounts.
As the leader in DIY taxes, TurboTax has been dealing with escalating competition from Credit Karma, which is now a leading financial app among younger customers. Credit Karma started offering a free tax filing service in 2017.
Several legal experts have said the agreement raises serious antitrust concerns. Some have pointed to a similar attempt by H&R Block in 2011, when it tried to purchase another DIY tax software company. Regulators blocked the deal from going through.
Bloomberg Intelligence Analyst Julie Chariell said Intuit is the biggest DIY tax filing software provider in the US It shares about 80% percent of the market with H&R Block.
Credit Karma’s tax filing market share is growing at a rate of 3% percent. Its free tax preparation business grew by about 50% percent last year, the company stated.
“There’s no question the acquisition could and should face scrutiny,” said Aaron Edlin, a law and economics professor at the University of California at Berkeley. “There’s a huge concern when the leading firm in an industry such
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