The U.S. Justice Department has launched a lawsuit against the acquisition of Juniper Networks by Hewlett Packard Enterprise (HPE), expressing concerns over reduced competition. The department claims this merger will eliminate direct competition between HPE and Juniper, two major players in the American enterprise-grade WLAN solutions market. They claim such a move could lead to higher prices, stifle innovation, and limit options for U.S. businesses and institutions, violating Section 7 of the Clayton Act.
The complaint highlights Juniper’s role as a disruptor among top enterprise WLAN suppliers. It has reportedly driven down network operating costs, forcing its competitors, such as HPE, to offer better prices and invest in innovation. The Justice Department warns that merging HPE with Juniper would consolidate the market, leaving it dominated by HPE and its primary competitor, Cisco, accounting for over 70% market share.
Further allegations suggest HPE undertook explicit internal campaigns to “beat” Juniper, seen as a formidable market competitor. These claims include mandatory training for its team and urging aggressive tactics against Juniper in sales competitions. The lawsuit emphasizes, “This proposed merger would significantly reduce competition and weaken innovation.”
HPE and Juniper have countered the Justice Department’s suit, arguing that the analysis is flawed. They insist the merger would bring greater innovation and choice to the market. Their combined forces, they argue, would enhance competition against global technology giants, rather than diminish it.
Reactions to the lawsuit have been mixed. Antitrust expert Matt Stoller remarked, “The fight for more innovation is particularly crucial… this merger would lead to stagnation and failure.” Stoller emphasizes the need for American firms to be agile to remain competitive globally, especially against firms like Huawei.
The acquisition, announced last January by HPE, is valued at $14 billion. It aimed to enhance HPE’s networking segment’s growth and profitability. While the deal faced scrutiny, it passed reviews in the UK and EU, with regulators finding no competition issues.
