The complaint, filed in the Northern District of California, alleges that the merger would combine two of the nation’s top three wireless local area network (WLAN) technology providers and harm businesses, schools, and health care institutions that rely on high-quality networks.
According to the complaint, both companies are well-established in enterprise-grade WLAN solutions, where the DOJ says HPE holds the second-largest market share and Juniper the third.
In announcing the suit, the DOJ stated that reducing the field from three main suppliers to two—HPE and industry leader Cisco—would lessen choice and potentially inflate prices for a broad segment of American enterprises.
“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,” acting Assistant Attorney General Omeed A. Assefi said.
He said the 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.”
The DOJ argues that Juniper has emerged as a disruptive force in the industry through innovations that include advanced artificial intelligence operations.
The complaint points to internal HPE communications that reference an intense rivalry with Juniper in bidding for major customers.
It alleges that such competition benefits institutions by bringing prices down and improving product capabilities.
Without Juniper as an independent challenger, the DOJ asserts, businesses ranging from large hospitals to major universities could face fewer viable WLAN options and higher costs. Officials claim that this would make it easier for the remaining market leaders to coordinate terms that are less favorable to customers and reduce the overall pace of innovation.
Hewlett Packard Enterprise, headquartered in Texas, leads its wireless networking operations from California. Juniper Networks is based in Sunnyvale, California.
HPE and Juniper said in a joint statement that the DOJ’s analysis is “fundamentally flawed.”
They assert that the deal will “provide customers with greater innovation and choice” and that the government’s view of the WLAN sector lacks a full appreciation of existing competitive realities. According to the companies, at least eight vendors could serve the same customers that HPE and Juniper do, making it unlikely the merger would squeeze out other contenders.
They also note that regulators in 14 jurisdictions have approved the acquisition and that no evidence of customer complaints has surfaced.
“We will vigorously defend against the Department of Justice’s overreaching interpretation of antitrust laws,” the companies said in the statement.
HPE and Juniper argue that the combined firm would reinforce national security by building core U.S.-based networking infrastructure and by accelerating innovation in artificial intelligence and cloud-centric solutions.
