The US Justice Department is suing to halt Hewlett Packard Enterprise’s (HPE) proposed $14 billion acquisition of Juniper Networks, arguing the merger would stifle competition in the critical market for enterprise wireless equipment, Bloomberg reports.
The lawsuit, filed Thursday, claims the deal would consolidate the market, leaving only two dominant players and potentially driving up prices and stifling innovation.
The Justice Department alleges that the acquisition would reduce the number of major competitors in the enterprise wireless sector from three — HPE, Juniper, and Cisco — to just two, giving these remaining companies control of 70% of the market. This marks the first antitrust challenge under the Trump administration, suggesting a continuation of a strong stance against corporate consolidation seen under President Biden.
According to the lawsuit, the merger would “eliminate head-to-head competition” that has benefited customers through lower prices and innovation. The department argues that the pressure on HPE to offer discounts and develop new features would significantly decrease, ultimately harming large organizations like universities, hospitals, and corporations that rely on this equipment.
Following the news, HPE shares fell by as much as 6% before recovering slightly, while Juniper’s stock dropped by 3%. Neither company has yet commented on the lawsuit.
HPE and Juniper both produce networking equipment, including routers and switches, essential for directing information flow across networks and the internet. Their equipment is widely used to provide wireless internet access to facilities and organizations.
The Justice Department highlights that rising competition from Juniper, particularly its product known as “Mist,” has pushed HPE to lower prices and enhance its own offerings. Internal communications within HPE even showed executives tracking Juniper’s growth and a sales leader encouraging his teams to “KILL MIST.”
The lawsuit claims HPE opted to acquire Juniper rather than continue to compete against it successfully. “Having failed to beat Mist on the merits, HPE changed tactics and in January 2024 opted to try to buy Juniper instead,” the agency stated.
HPE was created following the 2015 split of Hewlett-Packard, focusing on business-oriented products, including data center networking, cloud services, and high-powered computing.
HPE and Juniper executives met with Justice Department officials earlier this week to address concerns regarding the deal.
Interestingly, the merger has received unconditional approval from regulators in the European Union and the United Kingdom, who found no evidence it would raise competition issues in their regions.
