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TurboTax maker Intuit buying Credit Karma in $7.1B deal

Inside Telecom Staff

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TurboTax maker

By SARAH SKIDMORE SELL AP Personal Finance Writer

Intuit is buying consumer finance company Credit Karma in a $7.1 billion cash and stock deal that will take it deeper into the financial products realm.

The agreement announced Monday would bring together the maker of TurboTax, QuickBooks and other personal finance tools with one focusing on consumers’ access to financial products, such as finding the right loan or credit card.

The combined companies will aim to provide consumers with “a personalized financial assistant,” Intuit’s CEO Sasan Goodarzi said.

Credit Karma offers users free access to credit scores and information about financial products. It analyzes consumers’ financial data and based on that, suggests products. Credit Karma gets paid by a bank or lender if a user gets a loan, credit card or other financial product through its system.

The company, founded in 2007 and based in San Francisco, says it has 37 million active monthly users. It generated nearly $1 billion in revenue in 2019, according to the companies.

Intuit, based in Mountain View, California, said it will pay for the deal — its largest yet — in equal portions of cash and its own common stock. The deal value includes an estimated $1 billion in equity awards to be offered over three years.

The companies argue that many consumers struggle with not knowing or not fully understanding where they stand with their finances. With that in mind, they envision providing users access to personal financial information — such as income, spending and credit history — in one place so that consumers can better understand their financial picture and use it to their advantage. That could be finding better interest rates, getting out of debt faster or meeting a savings goal. They will also be able to see personalized, pre-approved offers on loans and credit cards.

Company leaders say consumers’ data will remain their own and users can opt not to share it in order to get personal offers. But if they do, as many Intuit clients already opt to, they could for example, get an offer for a high-yield savings account if they got a tax refund.

Analysts said the deal makes strategic sense and investors welcomed the news, sending Intuit’s shares up more than 3% in after-hours trading on a particularly rough day in the markets.

Credit Karma founder and CEO Ken Lin will continue to operate the company out of its San Francisco headquarters. The companies said they expect the deal to close in the second half of 2020, pending regulatory approval.

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GM looking to build 2nd US battery factory, Tennessee likely

Associated Press

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GM looking to build 2nd US battery factory, Tennessee likely

General Motors says it’s looking for a site to build a second U.S. battery factory with joint venture partner LG Chem of Korea.

The companies hope to have a decision on a site in the first half of the year, spokesman Dan Flores said Thursday.

Flores would not say where the company is looking, but it’s likely to be near GM’s Spring Hill, Tennessee, factory complex, which is one of three sites the company has designated to build electric vehicles.

A joint venture between GM and LG Chem currently is building a $2 billion battery factory in Lordstown, Ohio, near Cleveland, that will employ about 1,000 people. The site is fairly close to GM’s two other designated electric vehicle plants, one in Detroit and the other north of the city in Orion Township, Michigan.

GM is likely to need far more battery capacity if it’s able to deliver on a goal of converting all of its new passenger vehicles from internal combustion engines to electricity by 2035.

LG Chem now has a battery cell plant in Holland, Michigan, that supplies power to the Chevrolet Bolt hatchback and the new Bolt electric SUV.

Industry analysts have said that automakers face a global shortage of batteries as the industry moves away from gasoline powered vehicles. Most of the world’s batteries are built in China and other countries.

The Wall Street Journal first reported that GM and LG Chem are pursuing a site in Tennessee to build a new battery plant.

GM’s venture is risky, at least based on U.S. electric vehicle sales. Last year full battery electric vehicles accounted for only 2% of the U.S. market of 14.6 million in new vehicle sales. But automakers are set to roll out 22 new electric models this year and are baking on wider consumer acceptance.

The consulting firm LMC Automotive predicts that U.S. battery powered vehicle sales will hit over 1 million per year starting in 2023, reaching over 4 million by 2030.


DETROIT (AP) — By TOM KRISHER

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UK competition watchdog investigates Apple’s App Store

Associated Press

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UK competition watchdog investigates Apple's App Store

U.K. authorities have launched an investigation into Apple’s App Store over concerns it has a dominant role that stifles competition and hurts consumers.

The Competition and Markets Authority said Thursday it was looking into “suspected breaches of competition law” by Apple. The announcement adds to regulatory scrutiny of the iPhone maker’s app distribution platform, which is also the subject of three antitrust probes by the European Union’s executive Commission.

Apple said the App Store is “a safe and trusted place for customers” and a “great business opportunity for developers.”

The investigation was triggered in part by complaints from app developers that Apple will only let them distribute their apps to iPhone and iPad users through the App Store. The developers also complained that the company requires any purchases of apps, add-ons or upgrades to be made through its Apple Pay system, which charges up to 30% commission.

“Millions of us use apps every day to check the weather, play a game or order a takeaway,” Andrea Coscelli, the authority’s CEO, said in a statement. “So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny.”

The watchdog said it would consider whether Apple has a “dominant position” in app distribution for Apple devices in the U.K., and, if it does, whether the company “imposes unfair or anti-competitive terms on developers” that results in less choice or higher prices for consumers buying apps and extra.

Apple said it looked forward to explaining its App Store guidelines to the U.K. watchdog.

“We believe in thriving and competitive markets where any great idea can flourish,” the company said by email. “The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent.”

By The Associated Press

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UK extends job support, tax breaks for pandemic-hit economy

Associated Press

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UK extends job support, tax breaks for pandemic-hit economy

Britain’s treasury chief on Wednesday announced an additional 65 billion pounds ($91 billion) of support for an economy ravaged by the coronavirus pandemic, extending job support programs and temporary tax cuts to help workers and businesses in his annual budget.

Chancellor of the Exchequer Rishi Sunak told the House of Commons that it is too soon for the government to rein in spending, saying that his plans would “protect the jobs and livelihoods of the British people” through September as the government slowly lifts lockdown restrictions that have shut businesses across the U.K.

At the same time, he said Britain must be prepared to cut the deficit, announcing plans to increase the tax on corporate profits and boost revenue from personal income taxes in 2023.

“An important moment is upon us,” Sunak told the House of Commons. “A moment of challenge and of change. Of difficulties, yes, but of possibilities, too. This is a budget that meets that moment.”

U.K. public borrowing has risen to levels not seen since World War II as the government seeks to cushion the fallout from COVID-19, which has reduced gross domestic product by 10% and cost more than 700,000 people their jobs. Projections released Wednesday by the Office for Budget Responsibility show that the economy will still be 3% smaller five years from now than it would have been without the pandemic.

Sunak said government support programs have succeeded in mitigating the impact. The unemployment rate is now expected to peak at about 6.5%, rather than the 11.9% forecast last July, he said, citing estimates from the Office for Budget Responsibility. The economy is forecast to grow 4% this year and 7.3% in 2022.

On Wednesday, Sunak announced plans to extend those support programs for six months. They include a furlough program, under which the government pays 80% of the wages for private employees unable to work during the pandemic, as well as grants for self-employed workers, a temporary increase in welfare payments and tax relief for businesses.

Sunak cheered business leaders by offering a tax credit of up to 130% of the money companies invest in expanding and improving their operations. Sunak said the credit is expected to increase investment by 10% or 25 billion pounds over the next two years, creating jobs and boosting economic growth.

Stephen Phipson, chief executive of Make UK, described the policy as bold.

“Manufacturers have strong intentions to invest in capital equipment as well as digital and green technologies which are crucial for our long-term recovery,” he said. “Today’s announcement should help turbocharge investment to ensure that those plans turn into reality in the short-term.”

Looking to the future, Sunak said the government will in 2023 increase corporation tax to 25%, from the current rate of 19%, and freeze personal income tax thresholds, which will increase revenue as inflation boosts incomes.

But opposition leader Keir Starmer accused Sunak of failing to address deep-seated economic problems and banking on a “consumer spending blitz” to bail out the economy.

Starmer said the budget fails millions of key workers who are having their pay frozen, businesses swamped by debt, and families paying higher local property taxes.

“The central problem in our economy is a deep-rooted insecurity and inequality, and this budget isn’t the answer to that,” Starmer said. “So rather than the big, transformative budget that we needed, this budget simply papers over the cracks.”

Ian Blackford, the Scottish National Party’s leader in Parliament, criticized Sunak for continuing a strategy of temporary support that leaves businesses and consumers unsure of the future.

The budget leaves Scottish voters with a clear choice as the SNP campaigns to hold a second referendum on independence from the U.K., Blackford said.

“For the people of Scotland, this budget comes at a critical moment of choice,” he said, echoing Sunak’s language. “Post-Brexit and post-pandemic, Scotland now has a choice of two futures: The long-term damage of Brexit and more Tory austerity cuts, or the opportunity to protect her place in Europe and to build a strong, fair and green recovery with independence.”

LONDON (AP) — By DANICA KIRKA

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