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The Trump administration took its first antitrust action on Thursday, announcing a lawsuit to block a proposed $14 billion tech industry deal.
The U.S. Department of Justice filed suit to block Hewlett Packard Enterprise (HPE) from acquiring a rival wireless local area network (WLAN) tech provider, Juniper Networks.
According to the complaint, Juniper has grown rapidly from being a relatively small competitor in the enterprise-grade WLAN market to become one of the three largest U.S. suppliers of the technology. The DOJ contends that Juniper’s innovation has brought competitive pressures that have lowered costs for consumers – a dynamic that would be undercut if the deal were to go ahead, as HPE and market leader Cisco would control over 70% of the market.
“HPE and Juniper are successful companies. But rather than continue to compete as rivals in the WLAN marketplace, they seek to consolidate – increasing concentration in an already concentrated market,” said acting assistant attorney general Omeed Assefi of the DOJ’s Antitrust Division.
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Hewlett Packard Enterprise’s proposed $14 billion acquisition of Juniper was the subject of an antitrust lawsuit by the Trump administration’s DOJ. (AaronP/Bauer-Griffin/GC Images / Getty Images)
“The threat this merger poses is not theoretical. Vital industries in our country – including American hospitals and small businesses – rely on wireless networks to complete their missions. This proposed merger would significantly reduce competition and weaken innovation, resulting in large segments of the American economy paying more for less from wireless technology providers,” Assefi said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JNPR | JUNIPER NETWORKS INC. | 34.91 | +0.54 | +1.57% |
| HPE | HEWLETT PACKARD ENTERPRISE CO. | 21.11 | -0.07 | -0.31% |
DOJ’s complaint noted that HPE had a “mandatory training for its engineers and salespeople, to ‘beat’ Juniper when competing for contracts,” adding that HPE sales teams viewed the threat from Juniper as “dire.”
The complaint quoted one former HPE executive as telling his team that “there are no rules in a street fight” and that they should try to “kill” Juniper when competing with the firm for sales.
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Juniper and HPE pushed back on the DOJ’s lawsuit and argued their tie-up would be beneficial for the market. (Jaque Silva/NurPhoto via Getty Images)
HPE and Juniper pushed back on the DOJ’s lawsuit to block the merger, arguing in a statement that the agency’s “analysis of this acquisition is fundamentally flawed” and vowing to “vigorously defend against the Department of Justice’s overreaching interpretation” of antitrust law.
“Consistent with the conclusions reached by all other major antitrust regulators who have reviewed the deal, this transaction brings together two complementary networking offerings and will create a networking player with the scope and scale to more effectively compete with global incumbents,” the companies wrote.
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The DOJ’s suit to block the acquisition comes as dealmakers expect the new Trump administration to take a lighter regulatory approach to scrutinizing proposed deals after the Biden administration blocked several high-profile mergers.