On November 10, 2011, the District Court for the District of Columbia enjoined H&R Block’s (HRB’s) proposed merger with 2SS Holdings, makers of the digital tax preparation program TaxACT. U.S. v. H&R Block, Inc., 11-00948 (BAH), (D.D.C. Nov. 10, 2011) (Mem. Op.). The parties subsequently abandoned the transaction. Citing FTC v. Staples, Inc., 970 F. Supp. 1066 (D.D.C. 1997) and FTC v. Whole Foods Market, Inc., 548 F.3d 1028 (D.C. Cir. 2008), the Court found that the relevant market for purposes of its merger analysis was digital do-it-yourself (DDIY) tax preparation. It relied heavily on the parties’ ordinary course documents, including TaxACT’s confidential information memorandum. The Court rejected HRB’s argument that assisted tax preparation – hiring a CPA or a retail tax store specialist – is part of the relevant market, observing that, although DDIY and tax professionals generally compete for U.S. taxpayers, assisted preparation provides “an entirely different method, technology and user experience.” The Court also disagreed that “pen-and-paper” tax preparation is within the relevant market, noting that “penand- paper” is not a product at all, and concluding that a sufficient number of consumers would not switch to pen-andpaper in response to a small but significant DDIY price increase. The Court then found that the government had established a prima facie case of anticompetitive effects based on their showing that the merger would increase concentration, as measured by an increase in the Herfindahl- Hirschman Index (HHI) of 400, and that the post-acquisition HHI would be 4,691, which falls within the “highly concentrated” range under the Horizontal Merger Guidelines. Finding that HRB failed to rebut the government’s showing of anticompetitive effects, the Court rejected HRB’s arguments that any of the smaller companies already offering free DDIY products could expand and establish a sufficient reputation so as to preclude anticompetitive pricing. The Court further found that the transaction would increase the likelihood of coordinated effects between HRB and Intuit (maker of Turbo Tax). The Court also found the government had established the merger would likely have unilateral effects, dismissing an offer to maintain pricing at the same level for three years, and rejecting HRB’s argument, based on U.S. v. Oracle Corp., 331 F. Supp. 2d 1098 (N.D. Cal. 2004), that a less than 30% combined market share is too low to support an inference of unilateral effects.