The U.S. Department of Justice has filed a lawsuit to block Hewlett Packard Enterprise Co.’s (HPE) proposed $14 billion acquisition of Juniper Networks Inc., arguing that the merger would harm competition in the wireless local area network (WLAN) market. The complaint, filed in the Northern District of California, claims that the merger would reduce innovation, raise prices, and limit choices for American businesses and institutions, violating antitrust laws under the Clayton Act.
HPE and Juniper are the second- and third-largest providers of enterprise-grade WLAN solutions in the U.S. The Justice Department alleges that combining these two companies would eliminate critical head-to-head competition in the WLAN sector, particularly affecting industries that rely heavily on wireless technology, including healthcare, education, and retail.
“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 A. Assefi of the Justice Department’s Antitrust Division. “This proposed merger would significantly reduce competition and weaken innovation, resulting in American businesses and institutions paying more for less.”
WLAN technology is essential for modern workplaces, enabling millions of employees to access networks and share resources wirelessly. From retail employees processing payments to doctors accessing patient records on mobile devices, wireless networking is integral to business operations across the country. The merger, according to the government, would undermine this crucial technology by reducing the number of major competitors in the market.
Juniper Networks, a relatively new player in the WLAN space, has grown rapidly over recent years and has been a key disruptor, introducing innovative tools that have driven down the cost of operating wireless networks for many customers. This competition has forced HPE to innovate and reduce prices, creating significant pressure on the company. According to the complaint, HPE executives were highly concerned about Juniper’s growing market share, with one senior executive warning employees about the “dire” threat Juniper posed to their sales opportunities.
Now, HPE is seeking to acquire Juniper, raising concerns about further consolidation of an already concentrated market. If the merger were to proceed, it would leave just two dominant players in the U.S. WLAN market: the combined HPE and Cisco Systems, which currently holds the largest share. The Justice Department argues that this concentration would stifle innovation and give the merged entity excessive power to control prices and limit options for U.S. businesses.
Hewlett Packard Enterprise is based in Spring, Texas, with its WLAN-focused business unit located in Santa Clara, California. The case underscores the department’s commitment to protecting competition in critical technology sectors and preventing mergers that could harm consumers and the broader economy.
