The U.S. Justice Department sued H&R Block Inc. to stop its proposed purchase of TaxAct, saying the combination of the companies would reduce competition in the growing market for consumer tax preparation software.
“The combination of H&R Block and TaxAct would likely lead to millions of American taxpayers paying higher prices for digital do-it-yourself tax preparation products,” Christine Varney, the assistant attorney general in charge of the Department of Justice’s Antitrust Division, said in an e-mailed statement today.
H&R Block agreed to buy 2SS Holdings on Oct. 13 in a transaction valued at $287.5 million, according to the statement. H&R Block’s acquisition of 2SS Holdings would eliminate a company that has aggressively competed with H&R Block and “disrupted” the U.S. digital do-it-yourself tax preparation market through low pricing and product innovation, the department said in its antitrust complaint.
An end to head-to-head competition between TaxAct and H&R Block would leave only two major consumer digital tax preparation providers, the department said in its statement.
Gene King, a spokesman for Kansas City, Missouri-based H&R Block, didn’t immediately return a phone call seeking comment.
H&R Block fell 36 cents, or 2.2 percent, to $15.97 at 10:22 a.m. in New York Stock Exchange composite trading.
The case is U.S. v. H&R Block, 1:11-cv-00948, U.S. District Court for the District of Columbia (Washington).
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