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United States v. H&R Block, Inc. - 833 F. Supp. 2d 36 (D.D.C. 2011)


The basic outline of a horizontal acquisition case under Section 7 of the Clayton Act, 15 U.S.C.S. § 18, is familiar. By showing that a transaction will lead to undue concentration in the market for a particular product in a particular geographic area, the government establishes a presumption that the transaction will substantially lessen competition. To establish this presumption, the government must show that the merger would produce a firm controlling an undue percentage share of the relevant market, and would result in a significant increase in the concentration of firms in that market. Once the government has established this presumption, the burden shifts to the defendants to rebut the presumption by showing that the market-share statistics give an inaccurate account of the merger's probable effects on competition in the relevant market. If the defendant successfully rebuts the presumption of illegality, the burden of producing additional evidence of anticompetitive effect shifts to the government, and merges with the ultimate burden of persuasion, which remains with the government at all times. Ultimately, the Supreme Court has adopted a totality-of-the-circumstances approach to the statute, weighing a variety of factors to determine the effects of particular transactions on competition.


In 2010, approximately 140 million Americans filed tax returns with the Internal Revenue Service (IRS).  Despite the necessity of taxes, the task of preparing a tax return brings joy to the hearts of few. As a result, various businesses offer different products and services designed to assist taxpayers with preparing their returns. These tax preparation businesses principally include accountants, retail tax stores, and digital tax software providers – all of which provide important services to the American taxpayer. In this case, the United States, through the Antitrust Division of the Department of Justice, seeks to enjoin a proposed merger between two companies that offer tax software products – H&R Block and TaxACT – on the grounds that the merger violates the antitrust laws and will lead to an anticompetitive duopoly in which the only substantial providers of digital tax software in the marketplace would be H&R Block and Intuit, the maker of the popular "TurboTax" software program.


Would the merger between H&R Block and TaxACT violate Section 7 of the Clayton Act, 15 U.S.C.S. § 18?




The federal district court held that the proposed merger between H&R Block and TaxACT that make similar digital do-it-yourself tax preparation products was enjoined under 15 U.S.C.S. § 25 because the merger violated Section 7 of the Clayton Act, 15 U.S.C.S. § 18, in that the totality of the evidence confirmed that anticompetitive effects were a likely result of the merger. The merger would have given the companies control over 90 percent of the market for digital do-it-yourself tax preparation products.

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