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TurboTax maker spends $ 7.1 billion to buy Credit Karma, a competitor of the free tax authorities

Has reached Intuit an agreement to acquire Credit Karma, a company known for offering free credit score checks. The acquisition gives Intuit – which owns TurboTax, Quickbooks and Mint – another set of consumer-focused financial products. It is also a potentially serious competitor: Credit Karma has been offering free tax returns since 2017, which may result in customers being taken from TurboTax.

That is a serious consequence of this merger. In the past year, Intuit has received much criticism for handling free tax returns, has been caught actively hiding a tax return product that it promised the IRS that it would give away for free and send customers to paid products. It is theoretically bad news if the company behind that policy takes control of another free-to-use alternative.

Credit Karma is expected to be made public this year. Instead, it accepts $ 7.1 billion in cash and shares from Intuit to be acquired. The deal is expected to close in the second half of 2020.

Credit Karma, founded in 2007, is known to offer important services for free – such as credit checks, which in the past were usually a paid product – and later earn money from additional financial services that it provides to customers once it has their information. That includes offering credit cards and loans from partners, and then receiving compensation for referring the customer. Credit Karma promises its service “will always be free.”