Jan. 31 (UPI) — The Department of Justice sued Thursday to block the $14 billion Hewlett Packard Enterprise Company acquisition of wireless tech competitor Juniper Networks.
The suit alleges that the merger between Hewlett Packard and Juniper, the second- and third-largest providers of wireless local area network technology respectively, would eliminate head-to-head competition between them.
“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,” said Omeed A. Assefi, acting assistant attorney general of the Justice Department’s Antitrust Division.
He added the loss of competition would result in large segments of the U.S. economy ending up “paying more for less from wireless technology providers.”
“Having failed to beat Mist on the merits, HPE changed tactics and in January 2024 opted to try to buy Juniper instead,” the suit states. “That decision puts at risk myriad consumer benefits that have resulted from competition between Defendants in the market for enterprise-grade WLAN solutions.”
The Justice Department said the acquisition would result in Cisco Systems, Inc., and Hewlett Packard alone “controlling well over 70% of the U.S. market and eliminate fierce head-to-head competition between Defendants, who offer wireless networking solutions under the HPE Aruba and Juniper Mist brands.”
The Justice Department said Juniper has been a disruptive force with rapid growth. Hewlett Packard recognized Juniper’s emerging threat and according to the Department of Justice “engaged in a campaign, including mandatory training for its engineers and salespeople, to ‘beat’ Juniper when competing for contracts.”
Hewlett Packard is now trying to buy its rival, which the Justice Department alleges is a violation of Section 7 of the Clayton Act, which prohibits acquisitions that substantially “lessen competition, or to tend to create a monopoly.”