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Intuit sues Checkfree over billing

Intuit accuses the provider of online-billing services of breaching its contract.

Intuit is suing Checkfree, claiming that Checkfree is violating an April 1998 contract that limits where Checkfree can offer bill presentment, which allows consumers to view their bills over the Internet.

Intuit, which owns almost 20 percent of Checkfree, seeks damages and an injunction to halt some Checkfree activities.

Intuit, which yesterday acquired payroll service Computer Resources, declined to comment beyond a brief news release issued today.

Checkfree, which on Monday added Nevada Power to its list of bill-presentment customers, said it had not seen the lawsuit, which was filed earlier today in Santa Clara County Superior Court in San Jose.

Bill presentment is a burgeoning area that lets individuals view their bills online and pay them. For billers like utilities or credit card companies, presenting bills online is far cheaper than preparing them on paper and mailing them.

Intuit's complaint states that Checkfree is not complying with the terms of an April 1998 bill presentment agreement with Intuit. In the contract, Intuit says, Checkfree agreed to provide processing services for Intuit's bill presentment products, and agreed not to offer similar products in certain distribution channels.

However, a Checkfree spokeswoman said, the company has been offering bill presentment from its Web site since March 1997. Checkfree also serves as a back-end processor and distributor for financial institutions that offer bill presentment to their customers. Its chief competitor in that business is TransPoint, a joint venture of Microsoft, payment processor First Data Corporation, and Citibank

In September 1996, Intuit traded its money-losing online banking and bill-payment processing division for 54 million shares of Checkfree stock, which today represents a 19.9 percent stake. Intuit had acquired the unit, then known as National Payment Clearinghouse, in July 1994.

At the time, Intuit had run into resistance from banks that feared Intuit was trying to get into their business and replace them as consumers' principal financial contact.