[Federal Register Volume 86, Number 81 (Thursday, April 29, 2021)]
[Notices]
[Pages 22706-22711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08971]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Intuit Inc., et al.; Response to Public Comments

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the Response to 
Public Comments on the Proposed Final Judgment in United States v. 
Intuit Inc., et al., Civil Action No. 1:20-cv-03441-ABJ, which was 
filed in the United States District Court for the District of Columbia 
on April 23, 2021, together with a copy of the one comment received by 
the United States.
    A copy of the comment and the United States' response to the 
comment is available at https://www.justice.gov/atr/case/us-v-intuit-inc-and-credit-karma-inc. A copy of the comment and the United States' 
response are available for inspection at the Office of the Clerk of the 
United States District Court for the District of Columbia. Copies of 
these materials may also be obtained from the Antitrust Division upon 
request and payment of the copying fee set by Department of Justice 
regulations.

Suzanne Morris,
Chief, Premerger and Division Statistics, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Intuit Inc., and Credit 
Karma, Inc., Defendants.
Civil Action No.: 1:20-cv-03441-ABJ

Response of Plaintiff United States to Public Comment on the Proposed 
Final Judgment

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act (the ``APPA'' or ``Tunney Act''), 15 U.S.C. 16, the 
United States hereby responds to the one public comment received 
regarding the proposed Final Judgment in this case. After careful 
consideration of the submitted comment, the United States continues to 
believe that the divestiture required by the proposed Final Judgment 
provides an effective and appropriate remedy for the antitrust 
violation alleged in the Complaint and is therefore in the public 
interest. The United States will move the Court for entry of the 
Amended Proposed Final Judgment after the public comment and this 
response have been published as required by 15 U.S.C. 16(d).

I. Procedural History

    On February 24, 2020, Intuit Inc. (``Intuit'') agreed to acquire 
Credit Karma, Inc. (``Credit Karma'') (collectively, ``Defendants'') 
for approximately $7.1 billion. After a thorough and comprehensive 
investigation, the United States filed a civil antitrust Complaint 
against Defendants on November 25, 2020, seeking to enjoin the proposed 
transaction because it would likely substantially lessen competition 
for the development, provision, operation, and support of digital do-
it-yourself (``DDIY'') tax preparation products that help individuals 
file U.S. federal and state income tax returns (``DDIY tax preparation 
products''), in violation of Section 7 of the Clayton Act, 15 U.S.C. 
18. See Dkt. No. 1.
    At the same time the Complaint was filed, the United States filed a 
proposed Final Judgment and an Asset Preservation and Hold Separate 
Stipulation and Order (``Stipulation and Order'') in which the United 
States and Defendants consent to entry of the proposed Final Judgment 
after compliance with the requirements of the APPA. See Dkt. Nos. 2-2, 
2-1. On December 1, 2020, the Court entered the Stipulation and Order. 
See Dkt. No. 3. On December 8, 2020, the divestiture contemplated by 
the proposed Final Judgment was effectuated to Square, Inc. 
(``Square''). Pursuant to requirements under the APPA, the United 
States filed the Competitive Impact Statement on December 10, 2020, 
describing the transaction and the proposed Final Judgment. See Dkt. 
Nos. 3, 10. On December 16, 2020, the United States published the 
Complaint, proposed Final Judgment, and Competitive Impact Statement in 
the Federal Register, see 85 FR 81501 (Dec. 16, 2020), and caused 
notice regarding the same, together with directions for the submission 
of written comments relating to the proposed Final Judgment, to be 
published in The Washington Post from December 15, 2020, through 
December 21, 2020. The 60-day period for public comment ended on 
February 19, 2020. The United States received one comment concerning 
the allegations in the Complaint, attached as Exhibit 1. On March 9, 
2021, the United States filed a Joint Notice of Amended Proposed Final 
Judgment (the ``Joint Notice''), attaching an Amended Proposed Final 
Judgment as Exhibit 1. See Dkt. Nos. 13, 13-1. As stated in the Joint 
Notice, the Amended Proposed Final Judgement addresses a technical 
clarification to the original proposed Final Judgment to allow Intuit 
to comply with its obligations under its Memorandum of Understanding 
with the Internal Revenue Service (IRS) in connection with Intuit's 
participation in the IRS Free File program. See Dkt. No. 13 at pp. 1, 
3. The Amended Proposed Final Judgment is identical in all respects to 
the original proposed Final Judgment except for the change to Paragraph 
IV(O)(2), which has been made for the limited purpose of permitting 
Intuit to comply with obligations to the IRS. See Dkt. 13 at p. 4.

II. The Complaint and the Amended Proposed Final Judgment

    The Complaint alleges that Intuit's proposed acquisition of Credit 
Karma would likely eliminate existing head-to-head competition between 
Intuit's DDIY tax preparation business, TurboTax, and Credit Karma's 
DDIY tax preparation business, Credit Karma Tax (``CKT''). 
Specifically, CKT has been an important competitive constraint on 
Intuit's TurboTax, and such head-to-head competition has led to lower 
prices and increased quality for DDIY tax preparation products. The 
Complaint also alleges that, absent the merger, the competition between 
TurboTax and

[[Page 22707]]

CKT would intensify as CKT continues to grow and erode Intuit's 
substantial base of TurboTax customers. The proposed acquisition, if 
left unremedied, would reduce existing and future competition, 
resulting in higher prices, lower quality, and reduced choice for the 
DDIY tax preparation products upon which millions of American consumers 
rely, in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    The Amended Proposed Final Judgment is designed to remedy the 
likely harm to competition alleged in the Complaint by requiring a 
divestiture that will establish an independent, economically viable 
competitor. Under the Amended Proposed Final Judgment, Defendants are 
required to divest CKT, as well as other related tangible and 
intangible assets, to an acquirer approved by the United States, in 
such a way as to satisfy the United States, in its sole discretion, 
that the divestiture assets can and will be operated by the acquirer as 
a viable, ongoing business that can compete effectively in the market 
for DDIY tax preparation products. Intuit proposed Square as the 
acquirer. After a rigorous evaluation, the United States approved 
Square as the acquirer. Square is a well-financed company with a 
popular and expanding consumer finance platform called Cash App. Square 
will offer the divestiture assets as a new DDIY tax preparation product 
via Cash App.\1\
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    \1\ See Square's Q4 2020 Shareholder Letter at 16, available at 
https://s27.q4cdn.com/311240100/files/doc_financials/2020/q4/2020-Q4-Shareholder-Letter-Square.pdf (last visited March 25, 2021) (``In 
the fourth quarter, we completed our acquisition of Credit Karma Tax 
for $50 million, which we intend to incorporate into the Cash App 
ecosystem as a tax filing product for individuals.'').
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    The Amended Proposed Final Judgment also allows the acquirer, at 
its option, to enter into a transition services agreement with 
Defendants for a period of up to 24 months. As explained in the 
Competitive Impact Statement, this option gives the acquirer sufficient 
time to integrate the divestiture assets into its existing business and 
to ensure customers can smoothly transition from CKT to the acquirer. 
See Dkt. No. 10 at 9.

III. Standard of Judicial Review

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a 60-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:
    (A) The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the Court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (DC Cir. 1995); United States v. U.S. Airways Grp., 
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the 
``court's inquiry is limited'' in APPA settlements); United States v. 
InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 
(D.D.C. Aug. 11, 2009) (noting that a court's review of a consent 
judgment is limited and only inquires ``into whether the government's 
determination that the proposed remedies will cure the antitrust 
violations alleged in the complaint was reasonable, and whether the 
mechanisms to enforce the final judgment are clear and manageable'').
    Under the APPA, a court considers, among other things, the 
relationship between the remedy secured and the specific allegations in 
the government's complaint, whether the proposed Final Judgment is 
sufficiently clear, whether its enforcement mechanisms are sufficient, 
and whether it may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the proposed Final Judgment, a court may not ```make de novo 
determination of facts and issues.''' United States v. W. Elec. Co., 
993 F.2d 1572, 1577 (DC Cir. 1993); see also Microsoft, 56 F.3d at 
1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 
2001); United States v. Enova Corp., 107 F. Supp. 2d 10, 16 (D.D.C. 
2000); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Instead, ``[t]he 
balancing of competing social and political interests affected by a 
proposed antitrust consent decree must be left, in the first instance, 
to the discretion of the Attorney General.'' W. Elec. Co., 993 F.2d at 
1577 (quotation marks omitted).
    ``The court should bear in mind the flexibility of the public 
interest inquiry: The court's function is not to determine whether the 
resulting array of rights and liabilities is one that will best serve 
society, but only to confirm that the resulting settlement is within 
the reaches of the public interest.'' Microsoft, 56 F.3d at 1460 
(quotation marks omitted); see also United States v. Deutsche Telekom 
AG, No. 19-2232 (TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). 
More demanding requirements would ``have enormous practical 
consequences for the government's ability to negotiate future 
settlements,'' contrary to congressional intent. Id. at 1456. ``The 
Tunney Act was not intended to create a disincentive to the use of the 
consent decree.'' Id.
    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'') (internal 
citations omitted); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461 
(quoting W. Elec. Co., 900 F.2d at 309).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its

[[Page 22708]]

complaint, and does not authorize the Court to ``construct [its] own 
hypothetical case and then evaluate the decree against that case.'' 
Microsoft, 56 F.3d at 1459; see also U.S. Airways, 38 F. Supp. 3d at 75 
(noting that the court must simply determine whether there is a factual 
foundation for the government's decisions such that its conclusions 
regarding the proposed settlements are reasonable); InBev, 2009 U.S. 
Dist. LEXIS 84787, at *20 (``[T]he `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d at 1459-60.
    In its 2004 amendments to the APPA, Congress made clear its intent 
to preserve the practical benefits of using consent judgments proposed 
by the United States in antitrust enforcement, Public Law 108-237 Sec.  
221, and added the unambiguous instruction that ``[n]othing in this 
section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d 
at 76 (indicating that a court is not required to hold an evidentiary 
hearing or to permit intervenors as part of its review under the APPA). 
This language explicitly wrote into the statute what Congress intended 
when it first enacted the APPA in 1974. As Senator Tunney explained: 
``[t]he court is nowhere compelled to go to trial or to engage in 
extended proceedings which might have the effect of vitiating the 
benefits of prompt and less costly settlement through the consent 
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen. 
Tunney). ``A court can make its public interest determination based on 
the competitive impact statement and response to public comments 
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. 
Supp. 2d at 17).

IV. Summary of Comment and the United States' Response

    The United States received one public comment in response to the 
proposed Final Judgment. The comment is from Travis Curtis, a Credit 
Karma Tax user and former TurboTax user and employee. Mr. Curtis's 
overarching concern is that Square will not effectively compete with 
nor constrain Intuit. More specifically, the concerns raised in the 
comment can be grouped into three categories: (1) Concerns with Square 
as the acquirer; (2) adequacy of the provisions within the proposed 
Final Judgment; and (3) dissatisfaction with Intuit's company history. 
Upon review, the United States believes that nothing in the comment 
warrants a change to the proposed Final Judgment or supports a 
conclusion that the Amended Proposed Final Judgment is not in the 
public interest. As required by the APPA, the comment, with the 
author's contact information removed, and this response will be 
published in the Federal Register.

a. Square Has the Means and Incentive To Compete Effectively

    Mr. Curtis expresses concern with Square as the approved acquirer 
and contends that Square does not meet the criteria for a divestiture 
buyer outlined in the proposed Final Judgment. In support of that 
contention, Mr. Curtis states that Square's available customer base is 
smaller than Credit Karma's customer base; Square's user demographics 
are less-aligned with the tax-paying population than are Credit Karma's 
user demographics; and the divestiture assets do not have ``any clear 
or immediate benefits'' to Square's business model. Exhibit 1 at 1-2.
    Square meets the criteria outlined in the Amended Proposed Final 
Judgment. Paragraph IV.D. of the Amended Proposed Final Judgment 
requires divestiture to an acquirer that ``has the intent and 
capability (including the necessary managerial, operational, technical, 
and financial capability) to compete effectively in the development, 
provision, operation, and support of digital do-it-yourself personal 
United States federal or state income tax return preparation and e-
filing products and services.'' The United States rigorously evaluated 
Square, including its qualifications, experience, incentives, business 
plans, finances, and commercial relationships. Based on that 
evaluation, the United States concluded that Square is capable, 
willing, and incentivized to compete effectively and will preserve 
competition in the market for DDIY tax preparation products.
    Although Square operates a multi-billion-dollar business with a 
variety of financial solutions for businesses and consumers, Mr. Curtis 
questions Square's ability to compete in the market for DDIY tax 
preparation products. Specifically, he suggests that Square is an 
unacceptable purchaser because its consumer-facing platform, Cash App, 
has a smaller and different user base than Credit Karma's broad 
consumer-facing platform. As a result, Mr. Curtis contends, Square will 
have less opportunity than Credit Karma to advertise the CKT DDIY tax 
product to existing users.
    There is no basis for this concern. Although Square may have a 
smaller user base for its personal finance products than Credit Karma, 
Square has the ability to market the divestiture assets to tens of 
millions of existing users. Moreover, Square has grown its Cash App 
user base tenfold over the past four years, demonstrating its marketing 
and customer-acquisition capabilities.\2\ Square's existing consumer-
facing products--and experience in those markets--will enhance, rather 
than hinder, Square's ability to compete in the market for DDIY tax 
preparation products.
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    \2\ See Square's Q4 2020 Shareholder Letter at 4, available at 
https://s27.q4cdn.com/311240100/files/doc_financials/2020/q4/2020-Q4-Shareholder-Letter-Square.pdf (last visited March 25, 2021).
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    Mr. Curtis also questions Square's commitment to competing in the 
market for DDIY tax preparation products. Specifically, he suggests 
that Square is an unacceptable acquirer because ``CKT does not have any 
clear or immediate benefits to the Square model.'' Exhibit 1 at 1-2. 
The United States assessed Square's business plans and incentives to 
compete and found that Square has the incentive to maintain the level 
of premerger competition in the market for DDIY tax preparation 
products.
    The United States determined that the addition of DDIY tax 
preparation capabilities is consistent with Square's stated strategy 
and past business practices. The United States' assessment was 
confirmed by Square in a recent filing with the Securities and Exchange 
Commission, in which Square stated that it ``see[s] the launch and 
advertising of new Cash App features as an important way to attract new 
customers'' and offers certain features for free to encourage use of 
the platform.\3\
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    \3\ See Square's 2020 10-K at 12, available at https://s27.q4cdn.com/311240100/files/doc_financials/2020/q4/Square-10K-2020.pdf (last visited March 25, 2021).
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    Mr. Curtis also suggests selling the divestiture assets to the IRS 
instead of Square to remedy perceived failings of the Free File 
Alliance program. However, any alleged failings of the Free File 
Alliance program are outside the scope of the United States' merger 
review, the violations alleged in the Complaint, and the present APPA 
proceedings. See U.S. Airways, 38 F.

[[Page 22709]]

Supp. 3d at 76 (`` `Moreover, the Court's role under the APPA is 
limited to reviewing the remedy in relationship to the violations that 
the United States has alleged in its Complaint. . . .' '') (quoting 
United States v. Graftech Int'l, No. 10-cv-2039, 2011 WL 1566781, at 
*13 (D.D.C. Mar. 24, 2011)).

b. The Divestiture Gives Square Everything Necessary To Preserve 
Competition

    Mr. Curtis contends that, regardless of the identity of the 
approved acquirer, the provisions of the proposed Final Judgment are 
inadequate. He then lists a variety of additional provisions that 
ostensibly should have been included in the proposed Final Judgment. 
Exhibit 1 at 2. This is incorrect, however. The divestiture gives 
Square everything necessary to preserve competition.
    First, Mr. Curtis notes that there are ``[n]o requirements for 
transitioning the log-in and account environment required to separate 
CKT accounts from CK accounts with minimal burden to the consumer.'' 
Exhibit 1 at 2. However, the Amended Proposed Final Judgment allows 
customers to seamlessly access their CKT accounts after Square's 
purchase of the divestiture assets. Under Paragraph II.F.8. of the 
Amended Proposed Final Judgment, Square is receiving ``all records and 
data,'' including customer accounts, as part of the divestiture. For 
the Year 1 Period defined in the Amended Proposed Final Judgment, and 
pursuant to Paragraphs IV.M.2., IV.M.4., and IV.M.5. of the Amended 
Proposed Final Judgment, CKT users will continue to have access to 
their accounts through the same links that they have always used. 
Paragraph IV.L. provides Square with the option to receive transition 
services related to, among other things, data migration and technology 
infrastructure, to ensure that Square can make users' account data 
available once the divestiture assets are integrated with Square's 
platform.
    Second, Mr. Curtis complains that ``[m]any of the commitments of 
the Defendant, such as how long they must keep the CKT link on CK, are 
for only 2 years.'' Exhibit 1 at 2. The restrictions on the Defendants' 
behavior that Mr. Curtis seeks to extend are time-limited for an 
important reason. They are designed to allow a smooth transition of the 
divestiture assets to the acquirer without creating ongoing 
entanglements, which could dampen competition between Defendants and 
acquirer. A longer time period would unnecessarily compromise Square's 
independence.
    Third, Mr. Curtis advocates for prohibiting the transfer of 
customer consents under Section 7216 of the Internal Revenue Code and 
Treasury Regulations thereunder. Exhibit 1 at 2. In fact, the Amended 
Proposed Final Judgment does not impose any transfer requirement. 
Instead, Defendants are required to support the acquirer's efforts in 
obtaining such consents from customers during the Year 1 Period, as 
defined in the proposed Final Judgment. See Dkt. No. 2-2 at ] IV.M.3 & 
Dkt. No. 13-1 at ] IV.M.3. This arrangement gives Square the 
opportunity to more fully integrate data from the CKT business into the 
other features of its Cash App platform if the customer consents, 
putting Square in the same position as CKT.
    Finally, Mr. Curtis also implies that additional measures 
proscribing Defendants' and acquirer's activities going forward should 
be included in the proposed Final Judgment, such as limiting 
Defendants' use of ``paid search terms or other forms of advertising 
and marketing''; requiring long-term investment commitments from the 
acquirer; and limiting partnerships between Defendants and the acquirer 
in ``industries outside of DDIY tax prep.'' Exhibit 1 at 2.
    These additional proscriptions are unnecessary. First, the Amended 
Proposed Final Judgment is not intended to weaken or limit Intuit; it 
is intended to position Square to compete as effectively as CKT. 
Therefore, it is not necessary to restrict Intuit's marketing 
activities following its acquisition of Credit Karma. Second, the 
United States typically does not attempt to limit an acquirer's ability 
to resell the divestiture assets, because ``[c]onditions change over 
time'' and ``[t]he market for corporate control is imperfect.'' \4\ 
Instead, the United States insists that ``the purchaser have both the 
intention and ability to compete in the market for the foreseeable 
future.'' \5\ Similarly, because conditions change over time, the 
United States is not well-positioned to make business decisions, such 
as investment levels, for the acquirer after it assumes control of the 
divestiture assets. Finally, it is not necessary to limit partnerships 
between Defendants and Square in industries that are not implicated by 
the proposed transaction because Square has every incentive to use the 
divestiture assets to compete and succeed in the market for DDIY tax 
preparation products.
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    \4\ See U.S. Department of Justice, Antitrust Division Merger 
Remedies Manual, at 30-31 (Sept. 2020), (https://www.justice.gov/atr/page/file/1312416/download).
    \5\ See id. at 30.
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    The proposed Final Judgment is the result of a thorough 
investigation, during which the United States scrutinized Defendants' 
and the acquirer's businesses and operations to identify a full 
complement of assets, personnel, and rights needed to preserve 
competition in the market for DDIY tax preparation products. The 
divestiture gives Square everything necessary to preserve competition.

c. Comments Regarding Intuit's History Are Beyond the Scope of This 
Action

    Mr. Curtis also notes dissatisfaction with aspects of Intuit's 
company history. These concerns go beyond the allegations in the United 
States' Complaint and are thus beyond the scope of APPA review. See 
U.S. Airways, 38 F. Supp. 3d at 76 (`` `Moreover, the Court's role 
under the APPA is limited to reviewing the remedy in relationship to 
the violations that the United States has alleged in its Complaint. . . 
.' '') (quoting Graftech, 2011 WL 1566781, at *13).

V. Conclusion

    After careful consideration of the public comment, the United 
States continues to believe that the Amended Proposed Final Judgment 
provides an effective and appropriate remedy for the antitrust 
violation alleged in the Complaint and is therefore in the public 
interest. The United States will move this Court to enter the Final 
Judgment after the comment and this response are published as required 
by 15 U.S.C. 16(d).

Dated: April 23, 2021.

Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA

/s/--------------------------------------------------------------------
Brian Hanna,

Attorney for the United States. U.S. Department of Justice, 
Antitrust Division, 450 Fifth Street NW, Suite 8000, Washington, DC 
20530, Tel: (202) 598-8360, Email: [email protected].

EXHIBIT 1

    From: [Redacted]
    To: ATR-Antitrust--Internet (ATR)
    Subject: Public Comment on U.S. V. INTUIT INC. AND CREDIT KARMA, 
INC.
    Date: Friday, February 5, 2021 5:36:41 p.m.

To Whom It May Concern,

    My name is Travis Curtis and I write to add public comment to the 
case United States v. Intuit Inc. and Credit Karma, Inc. according to 
the Tunney Act. I write today as a taxpayer, DDIY tax prep software 
user, Credit Karma

[[Page 22710]]

Tax user, former TurboTax user and employee. I worked for four tax 
seasons at Intuit TurboTax as a Business Data Analyst. I have also 
worked at other financial services and tech companies as a data analyst 
in valuation, operations, marketing, and product. I say this to provide 
background and for transparency sake as my concerns are honest and 
sincere and I would like them to be treated as such.
    The Proposed Final Judgement states, ``D. The divestiture must be 
made to an Acquirer that, in the United States' sole judgment, has the 
intent and capability (including the necessary managerial, operational, 
technical, and financial capability) to compete effectively in the 
development, provision, operation, and support of digital do-it-
yourself personal United States federal or state income tax return 
preparation and e-filing products and services.'' I believe that Square 
does not meet these requirements for an eligible Acquirer and that the 
Proposed Final Judgement comes short in its requirements and does not 
adequately provide protection to the consumer for the following 
reasons:
    1. Credit Karma Tax would be moving from a business with 100 
million customers to Square's CashApp which is roughly 30 million, more 
than a two thirds reduction in the available customer base to advertise 
within the platform.
    2. Square user demographic aligns with the tax paying population 
much less than Credit Karma, which would result in a further reduction 
of customer base. Poor match of user demographic. CK provides credit 
scores so one can safely assume a large % of the user base overlaps 
with the tax paying base. Square provides B2B products to small 
businesses and provides money transfer services to consumers with 
CashApp, its largest offering by number of users. This service is 
marketed to a younger and lower income demographic, including students, 
often as a substitute to a bank account. Both of these factors lead me 
to assume the % of the Square user base that can and would use CKT is 
much smaller
    3. Loss of supportive business model. CKT data directly benefits 
and feeds into the CK business model and revenue generation. CKT does 
not have any clear or immediate benefits to the Square model. The lead 
of Square's Cash App, Brian Grassadonia, has stated, ``We're thrilled 
to bring this easy-to-use tax product to customers as we continue to 
build out the suite of tools Cash App offers. With this acquisition, we 
believe Cash App will be able to ease customers' burden of preparing 
taxes every year.''; however, that is the most firm commitment or 
reasoning announced by Square.
    I would like to do a more formal analysis of these two businesses; 
however, there is little publicly available information and the 
Competitive Impact Statement provides no details, no metrics, and no 
analysis of the businesses to support the conclusion that Square meets 
the requirements of an Acquirer. There is nothing about how much of the 
CKT customer base came from the CK customer base, retention rates, new 
customer attraction rates, analysis of marketing channels, the entire 
document is devoid of any analysis of impact. I am not a lawyer nor do 
I have any experience with these documents; however, I expected some 
sort of justification for the decision.
    Regardless of the chosen acquirer, I believe that the Proposed 
Final Judgement's requirements, limitations, and enforcement of the 
parties fall short in the following ways:
    1. No requirements for transitioning the log-in and account 
environment required to separate CKT accounts from CK accounts with 
minimal burden to the consumer.
    2. Many of the commitments of the Defendant, such as how long they 
must keep the CKT link on CK, are for only 2 years.
    3. Signed 7216 waivers/consents should not transfer over at all.
    4. No limitations on the Defendant on paid search terms or other 
forms of advertising and marketing. As of today, Jan 14th 2021, Intuit 
has paid to get the top result for the term ``credit karma tax''.
    5. No requirements or commitments from the Acquirer to invest or 
continue business long term.
    6. No limitations on other partnerships between Intuit and the 
Acquirer industries outside of DDIY tax prep.
    These inadequacies in the Proposed Final Judgement at worst allow 
for blatant corruption as nothing prevents Intuit and Square from 
having colluded together on this to get rid of CKT and at best do 
little to ensure the continued success of CKT. While I make no 
assertion about motives, I cannot help be concerned by the lack of 
protection provided to CKT, taxpayers, and consumers. Technology 
companies have been given a large amount of leeway when it comes to 
regulation out of fear of stifling innovation; however, this has 
created a completely opaque environment where those same technology 
companies are taking advantage of the situation.
    The following hypothetical scenario would be completely possible 
under the Proposed Final Judgement: Intuit acquires Credit Karma and 
sells Credit Karma Tax to Square. Intuit then adds a button to the 
Credit Karma website directing customers to the TurboTax site to get 
their taxes done by a tax professional. Since the Proposed Final 
Judgement only places limitations of DDIY tax preparation software and 
the current link from CK to CKT, there is nothing to prevent them from 
adding a new button that links to non-DDIY tax preparation solutions, 
such as the new TurboTax Live Full Service product which Intuit has 
launched for the fiscal year 2020 tax season. That change could take 
place any moment. Credit Karma Tax has also benefited from being able 
to market to the Credit Karma user base; however, under the rules, 
Credit Karma Tax will only have access to advertise to the CKT customer 
base, from 100 million customers to ~2 million, a 98% reduction. After 
2 years, even the existing button from Credit Karma to CKT can be 
changed to go to TurboTax. Worst of all is the possibility that the 
sale to Square could be paid off elsewhere. Both Intuit and Square are 
primarily B2B companies, not B2C; Intuit maintains Quickbooks and 
Square maintains their B2B POS hardware business. Even if Square didn't 
want CKT at all, Intuit could easily make up the sale price of CKT to 
Square by offering a deal or partnership between other, and franky 
larger, business units as the proposed rules only limit further 
partnerships between Square and Intuit in the DDIY tax prep space. 
Since Intuit is now entering the prepared taxes industry with TurboTax 
Live Full Service, they could even create a partnership in that space 
without violating the terms laid out. In the end, Intuit would be able 
to acquire Credit Karma, get rid of a major competitor in CKT, and even 
get paid $50 million dollars along the way.
    While I want to believe in the good intentions of all involved, I 
cannot overlook the context of the moment and the history of the actors 
involved. In 2010, Inuit was sued by the DOJ for employee antitrust 
violations, in 2019 and 2020 there was much reporting about Intuit's 
efforts to hide their IRS Free File product from the consumer, and 
currently Intuit is trying to settle a class action for the same issues 
with a value that would leave compensation at ~$2.10 per impacted 
customer. Intuit has also failed to innovate within the Free File 
Alliance product, a provision of the MOU, for years.
    If there truly is concern about ensuring consumers continue to have 
a

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free DDIY tax prep solution, there should be consideration to sell 
Credit Karma Tax to the IRS so that the IRS may directly provide this 
service to the American people for free. The $50 million sale would 
account for <0.5% of the IRS's operating budget. While this may be an 
extreme suggestion to some, I believe it is time that the American 
taxpayers get what they were promised when the industry successfully 
lobbied and created the Free File Alliance. The FFA program has been a 
failure since its creation and this is a once in a lifetime opportunity 
to fix it and truly put the taxpayer first, all for less than one half 
of a percent of the IRS budget.

Sincerely,

Travis Curtis.

[FR Doc. 2021-08971 Filed 4-28-21; 8:45 am]
BILLING CODE 4410-11-P