The Department of Justice sued to block Hewlett Packard Enterprise's planned acquisition of Juniper arguing that the combination will hamper competition in the enterprise wireless networking market.
In a statement and lawsuit, the DOJ said:
"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."
HPE announced the acquisition more than a year ago. The DOJ argument is that the combination of HPE and Juniper along with Cisco will represent 70% of the wireless local area network market. According to the DOJ complaint, HPE couldn't beat Juniper's Mist AI capabilities so it chose to acquire its rival.
HPE said the DOJ lawsuit "is fundamentally flawed" and an "overreaching interpretation of antitrust laws." HPE said that its networking portfolio is complementary to Juniper's products. The company said:
"The DOJ’s claim that the WLAN market is composed of three primary players is substantially disconnected from market realities. As customers shift to AI and cloud-driven business strategies for secure, unified technology solutions to protect their data, barriers to entry have decreased and expansion and competition for WLAN has intensified. As such, WLAN is an extremely competitive market with a broad set of players, all of whom are fighting for business and winning bids in competitive RFP processes. The transaction will not impede the ability of other WLAN vendors to vigorously compete."
HPE also noted that its proposed acquisition of Juniper has been approved by antitrust regulators in 14 jurisdictions including the European Union.
Constellation Research analyst Holger Mueller said:
“If anybody would have thought that the Trump administration would be more lenient on M&A – here is the counterproof. A dominant position in the WLAN market Is far from being achieved but given the bad track record of tech enterprises have in lawsuits with the DOJ, this is not good news for HPE investors.”
