Respondent Intuit’s Materials For Oral Argument

Before The Federal Trade Commission

In the Matter of Intuit Inc., Docket No. 9408

November 20, 2023
 

 

 

 

 

 

 

 

 

 

 

Preliminary Considerations That Counsel In Favor Of Finding

No Deception

The Evidence Does Not Show That Reasonable Consumers

Were Likely Deceived

– Complaint Counsel tested only consumer’s general awareness

– The challenged ads are not deceptive

– The website should be considered

– No consumer confusion by point of sale

The Proposed Cease-And-Desist Order Is Unwarranted

– AG Consent Order ensures no deception going forward

– Proposed order fails to address space-constrained ads

– No basis for extending order beyond TurboTax

2
 

 

Preliminary Considerations That Counsel

In Favor Of Finding No Deception
 

 

 

 

 

 

TurboTax Free Edition is a truly free, high-quality product that

benefits consumers.

The characteristics of the tax-preparation industry and Intuit’s

business model give Intuit an incentive not to deceive

consumers.

The FTC’s process has not been fair.

TurboTax Free Edition is a truly free, high-quality product that

benefits consumers.

The characteristics of the tax-preparation industry and Intuit’s

business model give Intuit an incentive not to deceive

consumers.

The FTC’s process has not been fair.

4
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TurboTax Free Edition is a

truly free product.

Consumers cannot pay to

use it.

RPF ¶69 (Rubin (Intuit) Tr. 1524, 1528, 1539;

Johnson (Intuit) Tr. 573, 614, 617, 622)

More than 60 million

taxpayers each year have

simple returns and

qualify to file for free with

Free Edition.

Each year, over 10 million

consumers file their taxes

completely for free using

Free Edition.

RPF ¶113 (RX820; RX821)

Between Tax Years 2014

and 2021, more TurboTax

customers filed with

Free Edition than with

any other TurboTax

product.

RPF ¶115 (RX820; RX821)

TurboTax maintains an

industry-leading

customer-retention rate

of approximately 80%.

Third-parties and

reviewers recognize

TurboTax as the “best

online tax software.”

RPF ¶127 (Rubin (Intuit) Tr. 1594-1596; RPF ¶91 (RX704 at 8; RX59) RPF ¶48 (RX505 at 3; RX80 at 2; RX1497 at 2)

RX814 at -6784).

5
 

 

 

Complaint Counsel’s case boils down to claiming the challenged

advertisements said:

“TurboTax is free” “TurboTax is free for you” “TurboTax is free for them”

CCB.19; Tr. 19 CC Pre-Trial Br. 48; CCB.6, 72 Tr. 50

6
 

 

 

 

 

 

 

Businesses that “seek to encourage repeat purchases” have “little incentive

... to misrepresent (either by an explicit false statement or a deliberate false

implied statement)” what they are selling.

“Where, as here, market incentives place strong constraints on the

likelihood of deception, the Commission will examine a practice closely

before proceeding.”

FTC Policy Statement on Deception,

103 F.T.C. 174, 181 (Oct. 14, 1983).

7
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed

Customer

Base

Intense

Competition

Low

Switching 

Costs

Consumer

Transparency

Repeat

Interactions

“[T]he conditions in the tax

preparation industry are not

consistent with conditions for

deception and are consistent

with conditions where

incentives are for selfdiscipline and reputationbuilding.”

RX1027 (Deal Expert Rep.) ¶27

The tax-preparation industry customer base grew by

an average of only 1.1% annually over the last ten

years.

Fixed

Customer

Base

Approximately 20% of taxpayers use a different taxpreparation method than the year before.

Intense

Competition

Low

Switching 

Costs

Consumer

Transparency

Repeat

Interactions

Consumers can freely browse offerings and import

and export their tax documents to and from

competitors’ product websites.

Consumers readily communicate about and review

tax-preparation products. Consumers also

understand when they have been deceived.

Consumers are generally required to prepare and file

a tax return each year, and repeatedly interact with

tax-preparation providers.

8
9 RX1501
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Greg Johnson,

Intuit Executive

[I]f when Intuit was marketing TurboTax Free Edition, it was creating an expectation

among consumers who did not qualify to file for free that they could, in fact, do so,” then

consumers would have been “incredibly disappoint[ed],” and “would leave”

TurboTax to find “another way of filing.” Johnson (Intuit) Tr. 575

“Repeat customers are the foundation of our business and business model. [Intuit]

count[s] on every year over 80% of our business starting with returning customers from the

prior year, and so repeat business, the trust that we earn with customers, the great

experience that they have is the starting point, the foundation for our entire business.”

Jack Rubin,

Intuit Executive

“If we were to tell people that they could file for free ... and then have them come and have

Rubin (Intuit) Tr. to pay, they would—they wouldn’t like that .... [I]t would be a bad product experience, a bad

1525-1526, 1529 customer experience. We would have very negative reviews, and we wouldn't have the

repeat business that we count on.”

“Having millions of short-term, dissatisfied customers who became victims of a ‘bait and

switch’ program ... would eliminate future revenue streams from the deceived customers,

would spread negative perceptions of Intuit, and would not be economically rational.”

Bruce Deal,

Economist

RX1027 (Deal Expert

Rep.) ¶65

10
“I just want to go to evil actors because there’s one more I really want

to talk about, and that is tax preparation companies. For years, Intuit,

the maker of TurboTax, flooded consumers with ads promising ‘free

free free’ tax-filing services only to trick and trap them into paying,

which is why taxpayers pay $250 on average each year just for the

privilege of filing their taxes. So state attorney generals have won

taxpayers money from Intuit and the FTC has also taken action. Can

you just speak about that?”

Representative

Pramila Jayapal

“Absolutely, so last year the FTC brought a lawsuit against Intuit

for those very types of deceptive practices that are laid out in

our complaint. That is still pending, but I couldn’t agree more

that claims of something being free but then ultimately it not

being so really hurts people.”

FTC Chair

Lina Khan

11
 

 

 

 

 

 

 

 

 

 

-

“I do not recall an advertisement saying

TurboTax is free.” William T.

convey that consumers viewing the ads can file their taxes for

free with TurboTax.” SD Order at 11.

The Commission’s own designee conceded that the ads

do not state that TurboTax is free.

Maxson

Assistant Director,

Division of Marketing

Practices

FTC’s Bureau of

Consumer Protection

GX161 (Maxson Dep. Tr.) at 71:19 20 12
 

 

 

 

13

GX551; GX699; GX734

SD Order 11.

That is absolutely not correct, as established

by the evidence presented.
 

 

 

 

 

 

 

 

14

June 12, 2008

IRS Research Conference

RX77 at 9190, 9193, 9201; RX78 at 14; RX79 at 8342

IRS Government Accountability Office

CA Franchise Tax Board

Intuit has not put forward ... evidence regarding common usage of

language.” SD Order at 12.

Intuit did present that evidence.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

-

-

-

Hon.

Charles R. Breyer

U.S. District Judge

for the

Northern District

of California

RX73 (TRO Hearing Tr.) 40:3 6

RX73 (TRO Hearing Tr.) 37:8 9

RX73 (TRO Hearing Tr.) 36:18 22

RX73 (TRO Hearing Tr.) 17:4 5

They dont say it is free to everybody, and nobody thinks it is free

to everybody.”

“[L]ooking at this one as an example ... It says ‘TurboTax free

edition, for simple tax returns only*’[.] That’s what it is.”

“[T]his ad ... tells me that it is limited to simple tax returns[.]”

“I mean, it is right there; isn’t it? I mean, it is right under the

word ‘free, free, free’ or ‘zero, zero, zero,’ it says ‘TurboTax free

edition, for simple tax returns only.’”

15
 

 

The Evidence Does Not Show That Reasonable

Consumers Were Likely Deceived
 

 

 

 

 

GENERAL

AWARENESS

WEBSITE

POINT

OF SALE

ADVERTISEMENTS

CONSUMER AWARENESS BEFORE

SEEING ADS

CONSUMER UNDERSTANDING

FROM SPECIFIC ADS

CONSUMER UNDERSTANDING

AT THE WEBSITE

CONSUMER UNDERSTANDING WHEN

THEY MAKE THEIR PURCHASE DECISION

17
 

 

 

Complaint Counsel’s case boils down to claiming the challenged

advertisements said:

“TurboTax is free” “TurboTax is free for you” “TurboTax is free for them”

CCB.19; Tr. 19 CC Pre-Trial Br. 48; CCB.6, 72 Tr. 50

18
 

 

 

 

 

GENERAL AWARENESS

WEBSITE

POINT

OF

SALE

ADVERTISEMENTS

Complaint Counsel’s primary

evidence of deception only tested

consumer’s general awareness and

perception, without seeing any ads

or the TurboTax website.

NOVEMSKY QUESTIONNAIRE

19
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36.6%

33.3%

0 10 20 30 40 50 60

Believe they

“can file for free”

“Allows me to file

my taxes for free”

Likelihood of

starting in Free

Edition

52.7%

not eligible to file with

Free Edition and did not

use TurboTax in last three

years.

Base: All taxpayers

Novemsky Survey

Results (Group A)

TurboTax

TY20 Study

Disclosure Efficacy

Survey Original

Disclosure Group

33.0%

P E R C E N T A G E O F R E S P O N D E N T S

GX303 (Novemsky Expert Rep.), Fig. 1, n.129); GX460; RX1017 (Hauser Expert Rep.) Exs. 3, 4a, and 5b 20
 

 

 

 

 

 

 

 

 

 

 

 

“[T]he purpose of ad interpretation is to determine

the claims that consumers—particularly the target

audience—take away from an ad.”

Telebrands, 140 F.T.C. 278, 291-292 (2005).

Rather than analyze Intuit’s target audience, Novemsky:

• Excluded the 60% of taxpayers who had already filed.

• Excluded the targeted consumers—taxpayers eligible for Free Edition.

• Over 20% of respondents opted out when they learned the

questionnaire would be used against Intuit.

• Included respondents aware of well-publicized, ongoing litigation.

RPF ¶546 ((Novemsky (FTC) Tr. 416-417; Hauser (Intuit) Tr. 901); RPF ¶543 (Novemsky (FTC) Tr. 359, 419-420); RPF ¶542 (GX303 (Novemsky Expert Rep.) ¶¶50-

51, 65, 71 & App’x I; RX1392 (Novemsky (FTC) Dep.) at 194-195); ); RPF ¶563 ((Novemsky (FTC) Tr. 469; GX303 (Novemsky Expert Rep.) App’x E) 21
 

 

 

 

 

 

Group A: Respondents who have not used a Group B: Used a paid TurboTax product Novemsky Survey

TurboTax product in past 3 years within the past 3 years (3/11 – 3/24)

TY 15 TY 16 TY 17 TY 18 TY 19 TY 20 TY 21 TY 22

2017 2018 2019 2020 2021 2022 2023

67% (404)

607

33% (203) Group A Group B No TurboTax Use in Past 3 Years Paid TurboTax Use in Past 3 Years

GX303 (Novemsky Expert Rep.) Fig. 1, ¶ 22 22
 

 

 

 

GX757 (Novemsky Survey Data, Questions S120 and S130)

30.9%

0.0%

0.0%

9.7%

12.9%

16.3%

18.3%

28.7%

0% 5% 10% 15% 20% 25% 30% 35%

Other

TaxAct

Group A

69.1%

Used Online

Tax Software

H&R Block

FreeTaxUSA

TaxSlayer

30.9%

Did Not Use Online

Tax Software

Don't know / Not sure

TurboTax

No Online Software Use

23
 

 

 

 

 

’ 24

December 9, 2022

Expert Report of Nathan Novemsky

Appendix E

GX303 (Novemsky Expert Rep.) App x E

“I think”

“I don’t think”
 

 

 

 ’ 25

December 9, 2022

Expert Report of Nathan Novemsky

Appendix E

GX303 (Novemsky Expert Rep.) App x E
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“It's been said a few

times now during survey

that you can file for free.”

“It is evident form [sic]

the past questions

that it is free.”

“I think I can file for free

because it was mentioned

in this survey and I have

seen advertising for this

product.”

“Because you keep

yelling [sic] me I can.”

“Becuase [sic] this

survey is suggesting 

that I can file it for 

free.”

“Just to be told that I can.

I'm assuming since this

has been asked 4 times

that it must be free.”

“It's been said a few

times now during survey

that you can file for free.”

Respondent ID

5708

Respondent ID

1610

“It is evident form [sic]

the past questions

that it is free.”

“I think I can file for free

because it was mentioned

in this survey and I have

seen advertising for this

product.”

Respondent ID

1175

“Because you keep

yelling [sic] me I can.”

Respondent ID

5783

RX1017 (Hauser Expert Rep.) ¶44 n.80

“Becuase [sic] this

survey is suggesting 

that I can file it for 

free.”

Respondent ID

10394

“Just to be told that I can.

I'm assuming since this

has been asked 4 times

that it must be free.”

Respondent ID

1836

26
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ’

T A T 2 2 0 : What is your 

understanding about whether or not

there is a cost to filing your own

income taxes using TurboTax online

software?

T A T 2 3 0 : You may have already said

this above, but please tell us again, in

your understanding, who, if anyone,

can file their taxes for free using 

TurboTax online software?

I think I can file my 2021 income taxes for free

with TurboTax

I don’t think I can file my 2021 income taxes for 

free with TurboTax

I do not have enough information

I’m not sure

Respondent contradicted themselves across

open ended responses*

Respondent provided non responsive open

ended responses*

T A T 2 20: What is your 

understanding about whether or not

there is a cost to filing your own

income taxes using TurboTax online

software?

T A T 2 30: You may have already said

this above, but please tell us again, in

your understanding, who, if anyone,

can file their taxes for free using 

TurboTax online software?

I think I can file my 2021 income taxes for free

with TurboTax

I don’t think I can file my 2021 income taxes for 

free with TurboTax

I do not have enough information

I’m not sure

-

Respondent contradicted themselves across

open-ended responses*

Respondent provided non-responsive - openended responses*

Initial categories given to blind coders =

Response options in Novemsky TAT240

Blind coder open-ended categorizations are then compared to

respondents’ closed-ended answers used by Novemsky

RX1017 (Hauser Expert Rep.) App x E 27
 

 

 

 

 

 

 

5.6%

34

12.2%

74

31.3%

190

43.2%

262

100.0%

607 Respondents Completing Novemsky Survey

Selected "I think I can file for free" in response to TAT240

Selected either "Turbotax advertisements" or "TurboTax

website" in response to TAT255

After removing respondents who expressed inconsistent

responses related to their understanding of filing for free

Considered only "TurboTax advertisements" and/or "TurboTax

website" (and no other sources) in response to TAT255

700 600 500 400 300 200 100 0

RX1017 (Hauser Expert Rep.) Fig. 5 28
 

 

 

 

GENERAL AWARENESS

WEBSITE

POINT

OF

SALE

ADVERTISEMENTS • TurboTax ads.

• Copy testing and market research.

• Reliable survey evidence.

EVIDENCE CONFIRMS THE ADS

WERE NOT DECEPTIVE

29
 

 

 

 

 

 

 

 

 

 

Complaint Counsel quote snippets from ads, which is not evidence

of what consumers actually saw or experienced:

“[T]he Commission looks to the impression made by advertisements as a whole.”

American Home Products v. FTC, 695 F.2d 681, 688 (3d Cir. 1982).

The FTC “must consider the advertisement in its entirety and not ... engage in

disputatious dissection.” S.C. Johnson v. Clorox, 241 F.3d 232, 238 (2d Cir. 2001).

The FTC must consider “the juxtaposition of various phrases” in “the entire document”

of an ad. FTC Policy Statement on Deception, 103 F.T.C. 174, 176 (1983).

What an ad conveys can be determined only “after examining the interaction of all of

the constituent elements.” Telebrands Corp., 140 F.T.C. 278, 429 (2005).

30
 

 

CCAB.13

Complaint Counsel disregard the qualifications that

accompanied those quotes.

31
GX197 32
RX202 33
34 GX195
35 GX371
 

 

 

 

GX630

“That’s right, TurboTax Free is free. Free, free,

free, free. Free Edition product only for simple

U.S. returns. Offer subject to change. See

details at TurboTax.com.”

36
 

 

 

 

 

 

 

 

 

 

Complaint Counsel have argued that this case would

“vindicate” the Free Guides.

The Free Guides recognize that the “public

understands” that free offers are usually coupled with

the requirement to purchase paid products at full price.

The ALJ did not address this guidance.

The ALJ did not address this guidance.

Complaint Counsel have argued that this case would

“vindicate” the Free Guides.

Complaint Counsel

Rely On The FTC’s

“Free Guides”

The FTC’s Guidance

Supports Finding 

No Deception

The ALJ’s Flawed

Response

CCB.68

The Free Guides recognize that the “public

understands” that free offers are usually coupled with

the requirement to purchase paid products at full price.

16 C.F.R. §251.1(b)(1)

ID.227

37
 

 

 

 

 

 

 

 

Reasonable consumers regularly encounter “free

product offers across a whole range of product

categories” that “most commonly come with terms

and conditions.”

Golder (Intuit) Tr. 1092, 1094

They expect free offers to be accompanied by certain

limitations, even “without ... the existence of a 

disclosure," and "even without reading all the words.”

Golder (Intuit) Tr. 1104, 1112

38
 

 

 

 

ppy pyp

returns. (Golder (Intuit) Tr. 1091, 1095-1096.) H&R Block Website, TY 2021

TaxSlayer Website, TY 2022

RX97; RX697; RX1047; see RX428 39
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[T]heres already a great deal of skepticism about free products or offerings

that [Intuit has] to overcome.”

Jack Rubin

Intuit Executive

RPF ¶486 (Rubin

(Intuit) Tr. 1524)

Peter Golder

Expert

“[O]ne of the key pieces to this is because consumers are exposed to all these

free offers with terms and conditions ... they will naturally be skeptical of a free

offer.”

RPF ¶487 (Golder

(Intuit) Tr. 1095-1097)

“[C]onsumer skepticism is ... really important and another manifestation really of

that lifetime of experience that consumers bring to them when they view a free

product ad in this context, but in any context.”

“[C]onsumers would not necessarily think that a free offer is free to everyone.

They wouldn’t necessarily think that it’s free for them ... there will be some terms

and conditions.”

Greg Johnson

Intuit Executive

The "skepticism associated with ... the word 'free'" prevents consumers from

"believing that you could get it for free."

Johnson (Intuit) Tr. 574

40
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A L a rg e P o r t i on o f T urb o T a x C us t ome r s D em on s t r a t ed

S k ept i c i sm A r ound F r e e P r o duc t O ff e r s

Intuit research in TY 2018 showed

that only 22 percent of respondents

were confident that TurboTax Free

Edition was actually free.

Even though it is a free product.

Other Intuit research has also found

this skepticism among consumers:

“How good can it be?”

“What’s in it for them?”

“Will they upsell me?”

“I find it hard to believe

that it is in fact free”

“It is NEVER truly free.

There is always some fee”

Source: Intuit Brand Sentiment Metrics Mid-Season TY 18

RX595; RX578; GX460 41
 

 

 

 

 

 

 

 

 

 

 

 -

showed that the challenged ads effectively communicated qualifications, including:

1) The specific TurboTax product being advertised;

2) That eligibility was based on the complexity of one’s tax return;

3) Exactly where consumers could find additional eligibility information—TurboTax.com.

TurboTax Free Edition is for simple U.S. returns only.

Not all The restriction There is a

TurboTax products relates to tax restriction

complexity

See if you qualify at turbotax.com. Offer subject to change.

Directs consumers to

TurboTax website to learn more

RPF ¶¶316 326 42
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

showed that they effectively prevented consumer confusion:

By identifying the

specific TurboTax

product:

The ads informed consumers that the offer does not apply to all

TurboTax products, rather only the specific product being advertised.

RPF ¶317; Golder (Intuit) Tr. 1118-1120

By stating that the

product was for

“simple tax

returns only”:

The ads informed consumers that the specific TurboTax product is not

free for everyone, and that eligibility is contingent on the complexity of

a consumer’s tax return.

RPF ¶322; Golder (Intuit) Tr. 1113-1115, 1118-1120

By instructing

consumers to

“see if you qualify”

or “see details at

TurboTax.com”:

The ads informed consumers that not every taxpayer qualifies for the

TurboTax product, and that consumers can find more information

about qualifications on the TurboTax website.

RPF ¶323; Golder (Intuit) Tr. 1123-1124

43
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professor Golder showed that TurboTax ads effectively disclosed the qualifications for free

TurboTax offers in the form, location, and with the amount of detail reasonable

consumers expect and comprehend.

“[C]onsumers from their own experience “[W]ith the TV ads, consumers are more likely to

are entirely used to seeing disclosures in process a shorter disclosure. On the website, they

a TV ad typically towards the bottom of are more likely to process a longer disclosure, and

the screen.” they can control that information.”

Golder (Intuit) Tr. 1112 Golder (Intuit) Tr. 1115-1116

“They may process the idea 

of simple without reading all

the words in a disclosure.”

“[C]onsumers understand how to process disclosures

like this because they see them in the context of their

lives as consumers.”

Golder (Intuit) Tr. 1112 Golder (Intuit) Tr. 1155

44
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

’

Professor Golder’s disclosure-benchmarking analysis showed that the disclosures in

Intuit’s ads were comparable or superior to benchmark disclosures

on every metric based on FTC guidelines:

PROXIMITY AND PLACEMENT PROMINENCE DISTRACTING 

FACTORS REPETITION DURATION 

Disclosure

Placement

Disclosure

on the

screen the

same time

the claim is

made?

Average

Disclosure

Height (as a

% of total

screen

height)

Color of

Disclosure

Text / Color

of

Background

Total Time

Disclosure is on a

Solid Screen in

Seconds (as a % of

total time disclosure

is on the screen)

Is there a

voiceover 

of

complete

disclosure

text?

Is the

disclosure

on the

company

website?

Total Time

Disclosure is on the

Screen in Seconds

(as a % of total time

of ad)

TurboTax Free

Ads

Comparable or

Superior to ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Benchmark

Companies?

RX1018 (Golder Expert Rep.) App x I 45
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

FTC’s .com Disclosure

Guidelines Golder’s TV Ad Disclosure

Benchmarking Metrics

RX96

FTC’s .com Disclosure

Guidelines Golder’s TV Ad Disclosure

Benchmarking Metrics

PROXIMITY AND PLACEMENT PROMINENCE DISTRACTING 

FACTORS REPETITION DURATION 

Disclosure

Placement

Disclosure on

the screen the

same time the

claim is

made?

Average

Disclosure

Height (as a %

of total

screen height)

Color of

Disclosure Text

/ Color of

Background

Total Time Disclosure

is on a Solid Screen in

Seconds (as a % of total

time disclosure is on

the screen)

Is there a

voiceover of

complete

disclosure

text?

Is the

disclosure

on the

company

website?

Total Time Disclosure

is on the Screen in

Seconds (as a % of

total time of ad)

RPF ¶¶234 236, 258

46
 GX340 47 at 6856
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ’ -

Revised hyperlink

language in Computer

Screen Image

Hyperlink added to

Computer Screen

Image

Revised hyperlink

language in Free

Edition Starting Point

Area

Extended duration for 

written disclosure

Increased disclosure

prominence

Modified written

disclosure

Modified “free”

content in

advertisement

Modified verbal

disclosure

Revised hyperlink

language in Free

Edition Header Area

Added hyperlink in

Free Edition “More

Details” Panel

Included explicit Free

Edition qualification

criteria (not behind a

hyperlink)

RX1017 (Hauser Expert Rep.) App x C 1, Figs. 16, 18, and 21 48
 

 

 

 

 

O R I G I N A L D I S C L O S U R E S R E V I S E D D I S C L O S U R E S

Consider Using 

Vertax 77.7%

36.8%

75.9%

Most Likely to Start

in Free Edition

Likelihood of Starting 

in Free Edition

RX1017 (Hauser Expert Rep.) Exs. 3, 4a, and 5b

43.6% 48.8%

33.4%

49
 

 

 

 

 

 

 

 

 

 

 

 -

“The results are ... not consistent with complaint

counsel’s hypotheses. There is no statistical

difference between the revised disclosures group

and the original disclosures group.”

Dr. John Hauser,

Professor of Marketing

Approximately 33% of respondents indicated they were

likely to start in Free Edition, roughly the same

percentage as the general population that qualifies to

file for free with TurboTax Free Edition. Again, “this end

result is just not consistent with the complaint

counsel’s hypothesis.”

Hauser (Intuit) Tr. 873 875 50
 

 

 

 

 

 

 

- - -RX1543 at 2 4, 19; Ryan Tr. (Intuit) 773:18 21, 775:2 7

They then answered a series of questions about the ads, including relating to

whether they believed they could file for free.

SURVEY

Participants watched one of four near-final Tax Year 2022 ads for either Free

Edition or a free TurboTax Live Basic offer.

The results show that the ads were not misleading consumers into !!! incorrectly believing that they could file for free.

51
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claimed it was insufficient for Intuits ads to disclose the existence and categoryof the

applicable limitations” on eligibility for its free offers while hyperlinking to full eligibility

details, ID 220.

Existing FTC guidance provides that an ad need only disclose the “nature and

relevance” of limitations; if details (including regarding “price”) “are too complex

to describe adjacent to the [relevant] claim, those details may be provided by

using a hyperlink.” GX316 at 10, A-8 (FTC .com Disclosures (Mar. 2013)).

Declared that Intuit must “avoid” describing its free

products as free, ID 224.

No case or other authority forbids advertising a free product as

free merely because the offer has qualifications.

Improperly held that Intuit’s evidence “fails to prove” the

lack of deception, ID 203.

CC has the burden of proof; there is no exception for cases

involving free claims.

52
 

 

 

 

 

 

 

• Complaint Counsel assert that “express claims” encompass “the

functional equivalent of express claims.” (CCAB.12).

• But “[e]xpress claims are ones that directly state the representation

at issue.” Thompson Medical Co., 104 F.T.C. 648, 788 (1984).

CC’s Reply in Support of Motion for Summary Decision at 28

Complaint Counsel conceded that the ads did not

directly state the express claim asserted.

53
 CC Response to Intuit SD SOF ¶18

CCAB.3

54
 

 

 

 

 GENERAL AWARENESS

WEBSITE

POINT

OF

SALE

ADVERTISEMENTS

• The TurboTax website clearly and

repeatedly disclosed free offers’

qualifications.

• Complaint Counsel cannot render

those disclosures irrelevant through

their deceptive-door-opener theory.

No Reasonable Consumer Visiting 

The Website Would Be Deceived

55
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The entirety of the

information that a consumer

sees necessarily includes the

website.

Every consumer

needed to go to the

website to use the

advertised product.

RPF ¶329

The parties’ experts

agree that only so

much information

can be placed in an

advertisement

before overloading

consumers.

RPF ¶¶138, 834; ID 224

All of the challenged ads

either expressly directed

consumers to the

TurboTax website or

linked directly to the

website.

RPF ¶¶215, 253,

269, 284, 294

56
57 RX1500
RX1499

58
RX1530

59
60

RX1530
RX9

61
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Erez Yoeli,

CC’s Expert

ppy 

seconds” to access the TurboTax website, and that once on the

website it took only “five to ten seconds” to encounter full

eligibility information for the free TurboTax offers. RX1396 (Yoeli (FTC)

Dep.) at 34-35

“[O]n []our home page, there will be multiple references where we

define simple tax returns only in blue that is designed to draw

your attention.”

Greg Johnson,

Intuit Executive

Johnson (Intuit) Tr. 595

The TurboTax Free Edition landing page—which contains the

qualifications to use the free product—can be reached by “clicking

on the TurboTax display ad[s],” “through search results,” and even

“through multiple places on the TurboTax.com website, through

TurboTax Blog [c]ontent, over press releases, and even from links

in other articles.”

Jack Rubin,

Intuit Executive

Rubin (Intuit) Tr.

1564-1565

RPF ¶¶253, 367, 790; RRF ¶367 62
 

63 RX1524; RX973; RX99
 

 

 

 

 

 

 

 

 

 

 

 

 

 

R E A S O N A B L E C O N S U M E R S

A R E L I K E L Y T O :

R E A S O N A B L E C O N S U M E R S

A R E N O T L I K EL Y T O :

See a TurboTax free product ad

and immediately assume that:

The offer definitely applies to them.

Consider TurboTax free product

ads in the context of their prior

experiences and their personalized

buying process.

Expect that free offers come with

terms and conditions  especially

those with disclosures.

Seek more information if they are

interested in the product 

especially when encouraged to do

so by ads.

There are no terms and conditions.

64
 

 

 

 

 

 

 

 

 

 

 

 

65

2 0 2 3

2 0 2 4

2 0 2 5

Tax Software Reviews

CPAs Near Me

POST-PURCHASE 

BEHAVIOR

Consumer makes

purchase

decision in

subsequent

years.

2 0 2 3

2 0 2 4

2 0 2 5

PURCHASE 

DECISION

Consumer

decides on taxpreparation

method.

EVALUATION OF

ALTERNATIVES

Consumer

assesses taxpreparation

providers.

INFORMATION

SEARCH

Consumer seeks

information on

tax preparation

options.

Tax Software Reviews

CPAs Near Me

PROBLEM

RECOGNITION

Consumer is

reminded that

she must

file taxes.

RX1018 (Golder Expert Rep.) Fig. 21

deliberative manner,which involves conducting research, consulting a variety of sources, and

evaluating alternatives. (Golder (Intuit) Tr. 1065-1076; RPF ¶¶502-509.)

65
 

 

 

 

 

 

 

 

 

 

 

 -

Spoke with friends/family

Read customer reviews or testimonials

Read articles, rankings, or third-party reviews

Watched online tutorials/videos

Viewed advertisements

Explored the IRS or state tax websites

Tried out one or more online tax website(s) without filing

Sought advice from a tax professional

Reviewed marketing emails

None of the above

Other

Don’t know/Unsure 0.0%

1.6%

9.6%

15.2%

19.2%

21.6%

26.4%

26.4%

26.4%

36.8%

37.6%

43.2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

H A U S E R P U R C H A S E D R I V E R S U R V E Y

P E R C E N T A G E O F R E S P O N D E N T S W H O S W I T C H E D O R C O N S I D E R E D S W I T C H I N G P R O V I D E R S

66

Average Number of Sources: 3

Respondents Who Said They Only Reviewed Ads: 2%

RX1017 (Hauser Expert Rep.) Exs. 11 12
 

 

 

 

 

 

 

 

 

 

 

 

Online tax preparation is done on a website from your home with easy access to

all information on the internet.

No case has ever applied this theory to modern internet commerce.

DirecTV Is Indistinguishable: The door-opener theory “is inapplicable here,

because (1) the Court has found that nothing in [the challenged ads] contradicts

the true terms of DIRECTV’s provision of services; and (2) for a complex product

like subscription satellite television services, a reasonable consumer would

understand the limitations of how information is presented in a one- or twopage flyer.” FTC v. DIRECTV, Inc., 2018 WL 3911196, at *15 (N.D. Cal. Aug. 16, 2018).

Point and click to the website, competitors’

websites, and all other online information

Complex product

Nothing contradicts the true terms

67
 

 

 

 

 

GENERAL AWARENESS

WEBSITE

POINT

OF

SALE

ADVERTISEMENTS

• Complaint rates belie deception.

• Golder’s complaint-benchmarking.

is inconsistent with deception.

• Customers’ actual experiences

disprove deception theory.

CONSUMER COMPLAINTS AND

FEEDBACK DO NOT REFLECT

DECEPTION

68
 

 

 

 

 

 

 

 

 

 

 

Customers whose

price expectations are

not met are likely to:

Complain publicly

Not repurchase

If consumers were misled into believing they could file for free,

they would express frustration once they were ultimately told to pay.

That frustration would manifest in a significant number of complaints,

negative reviews, and low customer retention.

Customers whose

price expectations are

not met are likely to:

Complain publicly

Not repurchase

RX542, Golder, Peter N., Mitra, Debanjan, and Moorman, Christine, “What Is Quality? An Integrated

Framework of Processes and States,” Journal of Marketing, Vol. 76, No. 4, 2012, pp. 1-23

RX554, Perreault, W., Joseph P. Cannon, and Edmund Jerome McCarthy, Essentials of Marketing,

McGraw-Hill Education, New York, New York, 2019 69
 

 

-

ypy

multi-ad, multichannel, multimodal, integrated marketing

campaign that was deceptive?

A. That would be a nightmare. ... [W]e would be overwhelmed

with complaints, in every channel, in social media. The PRS

and NPS scores would tank. Just the inbound phone calls to the

customer success lines, I don't know how we would pay for that.

We would go out of business trying to pay to handle all of the

complaints about that. That would be a nightmare. We would

never do that.

Q. Okay. And has Intuit been overwhelmed with complaints

since 2018?

A. No.

Jack Rubin,

VP of Marketing

RPF ¶647 (Rubin (Intuit) Tr. 1647 1649) 70
 

 

 

 

 

 

 

 

 

 

 

 

 

 -

• Complaint Counsel

s expert, Erez Yoeli, confirmed that brand names, like TurboTax,

provide consumers with “a means of retaliation if the quality does not meet

expectations,” including by “curtail[ing] future purchases.” (RX1370 (FTC) at 499-

500; Yoeli (FTC) Tr. 1739-1740.)

• One of those “means of retaliation” is consumer complaints—it is well-established

that complaints are a “major source of information on the quality of products and

companies.” (RX1552 (FTC) at 168.)

• The methods for filing a complaint are both well-known and easy for consumers

to find. To file a complaint with the FTC, for example, consumers can:

Submit a complaint online

Call the FTC directly

Contact a state attorney general’s office

Visit the Better Business Bureau website

RPF ¶¶624, 628 629 71
 

 

 

 

 

 

 

 

 

0.0003%

Complaints Identified by

Complaint Counsel

228 Complaints Identified by

Complaint Counsel Represent a 

Minuscule Portion of TurboTax

Customers

RPF ¶¶ 631-632, 637

86.4 million

TurboTax customers who filed at least

one tax return from TY 2015 to TY 2021

RX1018 (Golder Expert Rep.) Fig. 6 72
 

 

 

 

 

 

 

 

 

 

 

RX1552 at 171

Q. ... [F]or tax year 2021, you said there are

about ... 100 million people who could have

been deceived, right?

A.... I don’t think that I want to constrain the

number just to those folks.

Q. Okay, fine. 100 million or more. If you’re

right about that -- well, neither of us could

calculate in our heads a complaint rate that

low. Am I right, Mr. Yoeli?

A. You're right, I can’t keep track of the

zeros.

Yoeli Tr. (Complaint Counsel) 1750-1752

73
 

 

 

 

 

 

 

 

 

-

The “ample reports” that, according to the ALJ, indicate that

consumers were deceived consist of only:

TY2020

• 6 customer reviews.

• This accounts for substantially less than

0.0001% of all consumers who filed with

TurboTax in TY2020.

• 45 customer reviews or complaints.

• This accounts for substantially less than TY2021 0.001% of all consumers who filed with

TurboTax in TY2021.

ID.205; RRF ¶¶635 662 74
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• These reviews represent just 0.0001% of the more than 35 million returns filed

using TurboTax in TY21.

• 1,911 of these reviews were left by customers who paid to file their taxes with

TurboTax in prior years.

• 1,009 reviews were left by customers who could have filed for free but chose not

to do so.

• 56 of these reviews were filed by customers who did file their taxes for free in

TY21.

• Review ID #201709861: “TurboTax is so easy and reliable” and “the premier way to

file [in my humble opinion]... I will always use TurboTax even if it’s not free.”

• Review ID #199748719: The customer noted that he “started to file with a

different online tax preparer, but it [the other software] wasn’t free this year,” and

therefore switched to TurboTax to file his taxes.

improperly admitted expert exhibit—that purportedly indicate deception in

Tax Year 2021.

• These reviews represent just 0.0001% of the more than 35 million returns filed

using TurboTax in TY21.

Insignificant

Portion of

Consumers

Overcounts

Reviews

Includes

Positive

Reviews

• 1,911 of these reviews were left by customers who paid to file their taxes with

TurboTax in prior years.

• 1,009 reviews were left by customers who could have filed for free but chose not

to do so.

• 56 of these reviews were filed by customers who did file their taxes for free in

TY21.

• Review ID #201709861: “TurboTax is so easy and reliable” and “the premier way to

file [in my humble opinion]... I will always use TurboTax even if it’s not free.”

• Review ID #199748719: The customer noted that he “started to file with a

different online tax preparer, but it [the other software] wasn’t free this year,” and

therefore switched to TurboTax to file his taxes.

RAB.26; RX816 (Intuit); RRF ¶662 75
 

 

 -

500

400

300

200

100

0

31.3

495.8

58.9

223.9

86.7

191.2

Intuit’s Complaint

Rate is Statistically

Significantly Lower 

than Benchmarks

Intuit Benchmark Companies Direct Intuit Competitors Wireless Carriers TV Service Providers Auto Insurance Providers

Average

RX1018 (Golder Expert Rep.) Fig. G 2 76
 

 

 

 

 

 

 

 

 

 –

Filed Federal and

State Tax Returns

for Free

Explored TurboTax and

Pursued Other Options

13.4M

24.2%

17.6M

31.8%

23.1M

41.7%

Remaining

1.3m

2.4%

Paid to File and...

Expressed Rational Economic

Choice by Seeking to Maximize 

Tax Refund

Revealed Preference for

Paid Add-On Features or

Functionality

Demonstrated Awareness

of TurboTax Paid Products

RX1027 (Deal Expert Rep.) Fig. 10 (citing RX820 RX823) 77
 

 

 

 

 

 

- –

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

C

U

S

T

O

M

E

R

S

Saw an upgrade screen in less than 60 minutes (limited time investment)

1,311,231 Remaining 2.4% of TY21 Customers

534,919

134,886

43,776

43,776 Customers = Fewer than 1 in 1,000 of the 

55.5 Million TY21 Customer Base (0.08%)

New

Arrived At Website via TurboTax Ad

Customers

RX1027 (Deal Expert Rep.) ¶¶142, 150 153 (citing RX820 RX823) 78
 

 

 

 

 

 

 

 

 

 

 - – –

Remaining TY21 Customers

Arrived via TurboTax ad

+ New to TurboTax Direct Evidence Potentially

+ More than 60 min to upgrade screen Consistent With Deception 

Or Frustration

1. Complaints identified by Complaint

Counsel . . . or . . .

2. Low “likely to recommend” score

after purchase . . . or . . .

3. Low customer rating after purchase 43,776

510

510 Customers = Fewer than

1 in 100,000 of the 55.5 Million

TY21 Customer Base

RX1027 (Deal Expert Rep.) ¶¶12, 153, 155, 157, 160 161 (citing RX816 RX818, RX820 RX823) 79
 

 

 

 

 

–

31.8%

TY21 Customer Data

Inconsistent with

Allegations of

Deception

24.2%

41.7%

54.1M

510 

(less than 1 in 100,000) 1.3M May Be at Risk of Deception

RX1027 (Deal Expert Rep.) Fig. 17 (citing RX816–RX818; RX820 RX823) 80
Complaint Counsel’s theory that consumers mistakenly believed they could file for free is

 

 

 

 

 

 

 

-

Complaint Counsel’s theory that consumers mistakenly believed they could file for free is

contradicted by a Net Promoter Score survey of TurboTax customers.

Only 48% of respondents were even aware they could file for free, which is barely more

than the 44% who actually did file for free using TurboTax.

Jack Rubin,

Intuit Executive

That “tells me that we’re reaching simple filers who are eligible for TurboTax Free

Edition with ... the message that we have a Free Edition for simple tax returns.”

GX665; Rubin Tr. (Intuit) 1533 1534 81
 

- - -

100.0%

90.0%

80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

77.7%

87.8%

TurboTax Paid Products TurboTax Free Products

RX36; accord RX57 A; RPF ¶¶91 92, 649 650 82
 

The Proposed Cease-And-Desist Order Is Unwarranted
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 - - -

No “Free, Free, Free”

ads or substantially

similar ads.

All ads must disclose

qualifications, with

tailored requirements

depending on ad type.

All disclosures must

be “Clear and

Conspicuous.”

All disclosures must

be in “Close Proximity”

to the free claim.

Prohibits

misrepresenting any

material fact

concerning taxpreparation products.

Includes numerous

compliance measures.

requirements already govern advertisements for free TurboTax products:

No “Free, Free, Free”

ads or substantially

similar ads.

All disclosures must

be in “Close Proximity”

to the free claim.

All ads must disclose

qualifications, with

tailored requirements

depending on ad type.

Prohibits

misrepresenting any

material fact

concerning taxpreparation products.

All disclosures must

be “Clear and

Conspicuous.”

Includes numerous

compliance measures.

RX261 (Intuit) at 2 4, 7 8, 15 16 84
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Allegedly permitted “to prevent illegal including the “free, free, free” ads at the center Deceptive Ads of Complaint Counsel’s claim. practices in the future.” FTC v. Are No Longer Ruberoid Co., 343 U.S. 470, 473 Complaint Counsel focus on ads that are as Running (1952). much as 8-years old.

The Ads That

Are Running

Are

Demonstrably

Improved

Complaint Counsel bear the

burden to prove there is “some

cognizable danger of recurrent

violation.” United States v. W.T.

Grant Co., 345 U.S. 629, 633 (1953).

Intuit lessened the prominence of its “free”

claims, increased the size and contrast of its

visual disclosures, and added and

strengthened its verbal disclosures.

Copy testing of TY22 ads established that the

ads were not deceptive.

There Is

Already A The case is moot if there is

Consent Order “nothing for this court to enjoin.” Complaint Counsel presented no evidence

In Place Wold v. Robart, 2018 WL 1135396, that last year’s ads were deceptive.

Against Future at *5 (E.D. Wis. Feb. 28, 2018).

Deception

85
 

Replace with uncropped version of 

RX017

Tax Year 2014 Tax Year 2022

RX17; RX1547 86
87 RX1547
88 RX1547
 

 

 

RX1547

The ad also included a voiceover stating:

“Filing a simple return for free with TurboTax?

See if you qualify at TurboTax.com.”

89
RX1420 90
 

 

 

 

 

RX1483

“Simple returns only.

See if you qualify at

turbotax.com” language

was on the screen for

the entire ad.

91
RX1440 92
93 RX1431
 

 

 

 

 

 

 

 

 

 

 

 

 

Jack Rubin,

Intuit

Executive

display ads?

A. Yes, we have.

Q. And does Intuit plan to continue following those requirements?

A. Yes.

Cathleen Ryan,

Intuit Executive

Q. What, if anything, has Intuit done to ensure that it’s in

compliance with the terms of [the State AG] agreement?

A. Well, we have an entire compliance team, compliance office ...

that is checking and making sure that our advertising and

marketing are all consistent with the terms of that agreement, and

everybody in TurboTax marketing and leadership roles took

training on the agreement and the terms, and who’s new ... has to

take that training as well.

RPF ¶875 (Rubin

(Intuit) Tr. 1600)

RPF ¶864 (Ryan

(Intuit) Tr. 757)

94
95 RX1023
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Complaint Counsel bear the burden of

“‘satisfy[ing] the court that relief [for any

deception] is needed.’”

Benco Dental Supply Co., 2019 WL 5419393, at *75 (F.T.C. Oct. 15,

2019).

But Complaint Counsel failed to present any

evidence or legal support establishing that the

proposed order is needed to prevent deception or

would benefit consumers.

The ALJ explained that he “want[ed] to see

legal support for ... the proposed

remedy. This includes complaint counsel

providing a proposed order for relief

together with supporting law and

argument for all sections and parts of the

proposed order[.]” ALJ, Tr. 1835

96
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disclosures Under Disclosures Under

AG Consent Order ALJ’s Order

“See if you qualify.” “Not Free for a majority of

U.S. taxpayers.”

“For simple tax returns only.” “Form 1040 only.”

The existence and category

of material limitations.

“All the terms, conditions,

and obligations ... at the

outset of the offer.”

This compelled speech

dissuades taxpayers who do

qualify from filing for free.

Vague and seemingly overbroad

requirements with no practical

guidance as to what they mean.

Consumers testified that

“simple tax returns” is more

comprehensible than reference

to specific IRS forms.

97
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Situations covered (assuming no added tax Situations not covered: complexity): •Itemized deductions

•W-2 income •Unemployment income reported on a 1099-G

•Interest or dividends (1099-INT/1099-DIV) •Business or 1099-NEC income

that don’t require filing a Schedule B •Stock sales

•IRS standard deduction •Rental property income

•Earned Income Tax Credit (EIC) •Credits, deductions and income reported on

•Child Tax Credit (CTC) other forms or schedules (for example, income

•Student loan interest deduction related to crypto investments)

GX506 98
 

 

 

 

 

 

 

 

 

 

Greg Johnson &

Cathleen Ryan,

Intuit Executives

“[C]onsumers don’t really understand tax speak,” so listing all the

covered forms and schedules would be “terribly confusing.”

Johnson (Intuit) Tr. 599; Ryan (Intuit) Tr. 777

Consumer

Testimony

Consumers specifically testified that “simple tax returns” is easy

to understand and more comprehensible than references to

specific IRS forms.

GX138 (Adamson (Consumer) Dep.) at 72-73;

RX369 (Goldstein (Consumer) Dep.) at 90);

RPF ¶635; RRF ¶670

99
 

 

 

 

 

 

 

 

RX304

“[A]ll of the Respondents said that they could understand the

phrase ‘simple tax returns.’” That result “was consistent with our

overall experience.”

Rubin (Intuit) Tr. 1546

Jack Rubin,

VP of Marketing

Even Novemsky’s flawed questionnaire showed that “simple tax

returns” caused consumers to “understand[] their eligibility as being

about the level of simplicity or complexity of their return.”

Nathan

Novemsky,

CC’s Expert

RX1392 (Novemsky Dep. Tr.) at 251:1-4; see also id. at 253:8-15, 256:17-257:22

100
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

GX 138 (Adamson

(Consumer) Dep.)

at 58 59

GX 130 (Tew

(Consumer)

Dep.) at 21

Q. What does simple returns mean to you?

A. ... I would imagine it s just a t return th s fairly straightforward.

You have your income tax and you have nothing else that you need

to really have adjusted or worked with.

Q. Do you happen to remember why you didn t qualify?

A. [B]ecause my taxes were too complex for what it was doing.

GX138 (Adamson

(Consumer) Dep.)

at 58 59

GX130 (Tew

(Consumer)

Dep.) at 21

Q. What does simple returns mean to you?

A. ... I would imagine it’s' just a tax return that’s' fairly straightforward.

You have your income tax and you have nothing else that you need

to really have adjusted or worked with.

Q. Do you happen to remember why you didn’t' qualify?

A. [B]ecause my taxes were too complex for what it was doing.

Q. [W]hat was that understanding [of what was meant by the term

“simple returns”]?

A. [T]hat you don’t have student loan interest and only one source

of income and you’re not claiming any deductions.

GX135 (Phyfer

(Consumer)

Dep.) at 87

101
 

 

 

 

 

 

 - -

• Intuit aligns the qualifications for TurboTax Free Edition

to the IRS’s definition of a “simple tax return.”

• All of Intuit’s major competitors in the online tax-prep

market offer a free online tax-preparation product and

describe that product as being for taxpayers with

“simple returns.”

Consumer

understanding

Ubiquity in

the industry

Common

Clear

meaning

Usage

RPF ¶¶119 126, 136, 141 145 102
https://www.irs.gov/newsroom/irs-direct-file-update-free-secure-irs-run-electronic-filing-option-on-track-to-be-available-in-2024-as-a-limited-pilot

https://www.taxpayeradvocate.irs.gov/get-help/filing-returns/vita-and-tce/

103
 

 

 FTC’s .com

Disclosure

Guidelines

The FTC’s own guidance contemplates that different disclosures

are appropriate in space-constrained ads:

FTC’s .com GX316 at 15 Disclosure

Guidelines

104
 

 

 

 

 

 

 

 

 

 

 

 

 

No evidence consumers

are deceived by short

video ads without verbal

disclosures.

RPF ¶255; RRF ¶938

Consumers understand

that six-second ads do

not include all offer

details, and that they can

find additional

information on the

webpage.

RPF ¶¶254, 262, 522

Novemsky recognized that detailed

information in a short ad would lead to

information overload and “poor consumer

decision-making.”

RX1392 (Novemsky (FTC) Dep.) at 317

105
 

 

 

 

 

 

 

 

 

 

 

 -

g p

Non-SpaceConstrained Ads

SpaceConstrained

Video Ads

All Other SpaceConstrained Ads

(1) The existence and category of material limitations

on a consumer’s ability to use that free product; and

(2) That not all taxpayers qualify for the free product.

(1) The existence and category of material limitations

on a consumer’s ability to use that free product; and

(2) That not all taxpayers qualify for the free product.

(3) If longer than 8 seconds, a verbal disclosure that

not all taxpayers qualify.

(1) Eligibility requirements apply.

(2) If online, include a hyperlink or link the ad itself to

a TurboTax landing page that sets forth full

disclosure of all material eligibility restrictions.

RX261 (Intuit) at 7 8 106
 

 

 

 

 

 

 

In other cases, the FTC itself has imposed specific disclosure requirements for spaceconstrained ads. Those disclosures closely mirror the requirements already mandated

by the AG Consent Order.

Stipulated Order at 4-5, FTC v. AT&T Mobility LLC,

No. 14-cv-04785-EMC (N.D. Cal. Nov. 5, 2019).

Decision at 4-5, LCA-Vision, Docket No. C-4789

(Jan. 19, 2023)

107
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Some fencing inmay be appropriate, FTC v. Grant Connect, LLC, 763 F.3d 1094, 1105 (9th

Cir. 2014), when reasonably tethered to the challenged practice, American Home

Products Corp. v. FTC, 695 F.2d 681, 710-711 (3d Cir. 1982).

Complaint Counsel point to only two draft documents

relating to one product, and even that draft only purported

to be considering offering a free version of that product.

Those two draft documents, relating to one product, posing

a hypothetical, does not justify the order’s

Several products are easily distinguishable from TurboTax:

• CreditKarma is free for all consumers.

• Quickbooks does not offer a free tier at all.

There is no evidence concerning the business model of any

of these product line or how they advertise.

sweeping fencing in.

RRF ¶30

108
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

Jack Rubin,

VP of Marketing

“Those ads are not deceptive or [Intuit] wouldn’t run them,

and ... we believe that.”

If a stakeholder involved in creative review believe an ad was

deceptive or misleading, Intuit “would immediately address

it.” The ad would “[a]bsolutely not” make it on the air.

Cathleen Ryan,

SVP of Marketing

If Intuit at any point believed that a free advertisement was

misleading consumers, Intuit “would have stopped the ad.”

Greg Johnson,

Former General

Manager, 2018 2022

The ALJ did not question “the sincerity of Intuit’s witnesses testifying

to Intuit’s commitment not to deceive its consumers.” ID 221.

Ryan (Intuit) Tr. 701-702

Rubin (Intuit) Tr. 1599

Johnson (Intuit) Tr. 615, 622-624

109
 

The Proceeding Is Unconstitutional And Untimely
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

The Commissioners’ combined

exercise of accusatory and

adjudicative functions violates

due process and is therefore

unlawful.

Williams v. Pennsylvania,

579 U.S. 1, 4, 8 (2016).

Chair Khan should have been

disqualified because “a 

disinterested observer may

conclude that [she] has in

some measure” prejudged the

case.

Fast Food Workers Committee v.

NLRB, 31 F.4th 807, 815 (D.C. Cir. 2022).

This case involves Intuit’s right

to advertise, which is a “core

private right”— such claims

must therefore be decided in

Article III courts.

Axon Enterprise v. FTC,

598 U.S. 175, 198 202 (2023)

(Thomas, J., concurring).

The FTC’s Combination Of

Functions Violates Due Process

Chair Khan’s Continued

Participation Violates Due

Process

Intuit’s Private Rights Must Be

Adjudicated In An Article III Court

111
 

 

 

 

 

 

 

 

 

 

 

 

 

FTC Commissioners and ALJs are

impermissibly insulated from

presidential removal, in violation of

Article II.

Seila Law v. CFPB, 140 S.Ct. 2183, 2191 (2020);

Jarkesy v. SEC, 34 F.4th 446, 464 (5th Cir. 2022), cert.

granted, 143 S.Ct. 2688 (2023).

FTC’s Structure Violates

Separation Of Powers

The Commission’s unfettered discretion

to proceed before an administrative or

an Article III tribunal violates the

non-delegation doctrine.

Jarkesy, 34 F.4th at 461.

Congress Unconstitutionally Delegated

Legislative Power To The FTC

112
seasons to pass before initiating an action in 2022, challenging ads that ran as early

as 2015.

– Laches precludes the FTC from punishing Intuit for past ads, which it had known about

for years before filing suit.

– Ads from TY 2014-2017 are outside the borrowed three-year statute of limitations

applicable to Section 5 claims.

TY 14-17 Outdated Ads Three-Year SOL

Jan. 5, 2019 – Jan. 5, 2022 2023

2013 2015 2018 2019 2022

 

 

 

 

 

 

CC’s investigation

began

Complaint

filed

113
 

 

 

 

 

 

 

 

 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 11/13/23 OSCAR NO 608912 | PAGE Page 114 of 114 * -PUBLIC 

PUBLIC

CERTIFICATE OF SERVICE

On November 13, 2023, I caused the foregoing document to be filed electronically using 

the FTC’s E-Filing system, which will send notification of such filing to:

April Tabor The Honorable D. Michael Chappell

Office of the Secretary 600 Pennsylvania Ave., NW, Rm. H-110

Federal Trade Commission Washington, DC 20580 

600 Pennsylvania Avenue, NW

Suite CC-5610

Washington, DC 20580 

ElectronicFilings@ftc.gov

Also on November 13, 2023, I caused the foregoing document to be served via email on:

Roberto Anguizola Rebecca Plett

Federal Trade Commission Federal Trade Commission 

600 Pennsylvania Avenue NW 600 Pennsylvania Avenue NW

Washington, DC 20580 Washington, DC 20580 

ranguizola@ftc.gov rplett@ftc.gov

(202) 326-3284 (202) 326-3664

James Evans Sara Tonnesen

Federal Trade Commission Federal Trade Commission 

600 Pennsylvania Avenue, NW 600 Pennsylvania Avenue NW

Washington, DC 20580 Washington, DC 20580 

jevans1@ftc.gov stonnesen@ftc.gov

(202) 326-2026 (202) 326-2879

Counsel Supporting the Complaint

April Tabor The Honorable D. Michael Chappell

Office of the Secretary Administrative Law Judge

Federal Trade Commission 600 Pennsylvania Ave. NW, Rm. H-110

600 Pennsylvania Avenue NW Washington, DC 20580 

Suite CC-5610

Washington, DC 20580 

ElectronicFilings@ftc.gov

/s/ Derek Woodman

Derek Woodman

Counsel for Intuit Inc.