The Department of Justice (DOJ) on Thursday sued to block Hewlett Packard Enterprises from acquiring Juniper Networks, arguing that the merger between the nation’s second- and third- largest wireless network providers would reduce necessary competition in the industry.
The agency contends that Juniper’s emergence in recent years has forced rivals like Hewlett Packard to cut their prices and invest in new products, advantages that would be lost with consolidation.
“HPE and Juniper are successful companies. But rather than continue to compete as rivals in the [wireless local area network] marketplace, they seek to consolidate — increasing concentration in an already concentrated market,” Omeed Assefi, acting assistant attorney general of the DOJ’s antitrust division, said in a statement.
Hewlett Packard announced its plans to acquire Juniper for $14 billion last January. The Wall Street Journal reported in November that the DOJ was preparing a challenge and had met with top company officials.
“The threat this merger poses is not theoretical,” Assefi added. “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,” he continued.
Assefi was tapped to serve as head of the DOJ’s antitrust division while President Trump’s nominee, Gail Slater, awaits confirmation.
He reportedly has vowed to continue the aggressive approach to antitrust pursued by assistant attorney general Jonathan Kanter during the Biden administration, according to Bloomberg.
Hewlett Packard and Juniper pushed back on the DOJ’s assertions Thursday, calling the agency’s analysis “fundamentally flawed.”
“We will vigorously defend against the Department of Justice’s overreaching interpretation of antitrust laws and will demonstrate how this transaction will provide customers with greater innovation and choice, positively change the dynamics in the networking market by enhancing competition, and strengthen the backbone of U.S. networking infrastructure,” the companies said in a joint statement.
They argue the merger will bring together “two complementary networking offerings” and allow them to “more effectively compete with global incumbents.”
