DOJ Sues to Block $14 Billion Proposed Acquisition of Juniper Networks by Hewlett Packard

The United States Department of Justice (DOJ) announced yesterday that it is suing Hewlett Packard Enterprise (HPE) to block its proposed $14 billion acquisition of Juniper Networks, a rival provider of wireless local area network (WLAN) technology. HPE and Juniper are the second and third-largest enterprise-grade WLAN providers in the U.S.

The lawsuit follows a complaint filed in Northern California, alleging that the acquisition would eliminate competition between the two companies, increase prices, stifle innovation, and reduce options available to businesses and institutions across the country. The complaint further states that this violates Section 7 of the Clayton Act, which prohibits mergers and acquisitions that may substantially lessen competition or create monopolies.

WLAN technology includes both hardware and software, as well as AI platforms. The DOJ’s press release highlights the significance of this technology across critical industries, including retail, healthcare, education, and business. The legal challenge reflects the Biden administration’s aggressive stance on antitrust enforcement, particularly in highly consolidated markets like enterprise networking.

DOJ’s Case Against HPE: A Competitive Threat to the Market?

According to the complaint, Juniper rapidly rose from a smaller competitor to a top-three enterprise-grade WLAN supplier in the U.S. The company has been recognized as an innovator in the industry, offering cost-saving network solutions that have pushed HPE to lower prices and invest more in its own technology.

The complaint also alleges that HPE responded to Juniper’s growing market presence with an internal campaign aimed at countering the competitor. This reportedly included mandatory training for engineers and salespeople, instructing them to “beat” Juniper for contracts. Sales representatives allegedly described Juniper as a “dire” threat, citing the company’s efforts to disrupt HPE’s dominance. One senior executive reportedly told sales teams that “there are no rules in a street fight” when competing with Juniper, urging them to “kill” the upstart rival.

From a compliance perspective, these internal communications could raise serious antitrust concerns. While aggressive sales tactics are common in competitive industries, statements implying a strategy to eliminate a rival rather than compete on merit can attract regulatory scrutiny. Organizations must ensure that internal messaging and competitive strategies align with antitrust laws to avoid liability risks.

Market Consolidation & Regulatory Scrutiny

If approved, the acquisition would further consolidate an already concentrated WLAN market, reducing competition and limiting options for U.S. businesses and institutions. The DOJ argues that post-acquisition, only two companies—HPE and the top WLAN provider, Cisco Systems—would control 70% of the U.S. market. This level of consolidation is precisely what the Clayton Act was designed to prevent.

Acting Assistant Attorney General Omeed A. Assefi of the DOJ’s Antitrust Division emphasized the broader impact of reduced competition, stating, “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.”

Compliance Takeaways: Antitrust Risk in M&A

This lawsuit highlights critical compliance and risk considerations for companies engaging in M&A activity, particularly in highly regulated markets:

• Heightened Antitrust Scrutiny: Regulatory agencies, particularly the DOJ and FTC, are aggressively challenging deals that could reduce competition. Companies must ensure that M&A decisions account for potential antitrust enforcement risks.
• Internal Communications & Compliance Oversight: Messaging around competition strategy can create legal exposure if it suggests anti-competitive intent. Regular compliance audits and training can help prevent internal statements from becoming liabilities.
• Market Consolidation & Risk Mitigation: Companies operating in concentrated markets should anticipate longer regulatory reviews and stronger enforcement actions. Proactive engagement with antitrust regulators and thorough competition law assessments are essential to navigating M&A risks.

The DOJ’s aggressive stance on antitrust enforcement signals that companies must exercise greater caution in structuring acquisitions, particularly in industries where market dominance is already a concern. With regulators pushing back against anti-competitive behavior, compliance teams play a critical role in ensuring that M&A strategies align with evolving legal and regulatory expectations.

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