The Department of Justice moved on Monday to stop H&R Block from acquiring TaxACT, asserting that allowing the merger would lessen competition in the tax-preparation industry and harm millions of Americans.
“We are blocking this transaction because the proposed merger would substantially lessen competition in the tax preparation software market, resulting in higher prices, lower quality and reduced innovation,” Assistant Attorney General Christine Varney, in charge of the DOJ’s Antitrust Division, told reporters just after the DOJ filed an antitrust suit in U.S. District Court in Washington.
“Between 35 and 40 million taxpayers use software products to prepare and file their federal and state income taxes,” Varney said. “Three companies account for 90 percent of all sales of consumer tax software products. Combining H&R Block and TaxACT would destroy the head-to-head competition between these two companies, leaving only one other major competitor. That is not enough competition in this valuable industry.”
“TaxACT is an aggressive competitor in the market, and is feared by both H&R Block and the only other leading provider of these products, Intuit,” Varney said.
H&R Block announced in October that it intended to buy 2SS Holdings Inc., developer of the TaxACT tax-preparation program, for $287.5 million.