The U.S. Justice Department’s (DOJ) challenge to HPE’s proposed acquisition of Juniper Networks signals a concerning trend in merger enforcement that could undermine American economic vitality in a crucial high-tech sector. While regulatory scrutiny of consolidations is vital, a blanket skepticism toward merger activity—particularly one that overlooks significant procompetitive benefits—risks stifling innovation and weakening the very markets it purports to protect.
As I have previously discussed, robust merger and acquisition (M&A) activity is indispensable for a dynamic economy, facilitating capital reallocation to higher-valued uses and driving efficiency and innovation.
In the fast-evolving landscape of enterprise networking, the proposed HPE-Juniper merger presents a compelling case for its potential to enhance, rather than diminish, competition. Tellingly, the European Commission (EC) recognized as much when it approved the acquisition.
The Proposed Merger
The DOJ alleges the merger would harm competition by bringing together the second- (HPE) and third-largest (Juniper) providers of wireless local-area networks (WLAN) in the United States. The department stresses that “this would leave U.S. enterprises facing two companies commanding over 70% of the market: the post-merger HPE and market leader Cisco Systems Inc.”
Factors Suggesting No Harm to Competition
The DOJ’s complaint ignores a variety of factors strongly suggesting that the merger would not harm competition.
It relies primarily on market concentration, which modern antitrust economics views as only the starting point in determining whether a merger might reduce competition.
HPE and Juniper point out that DOJ’s market definition ignores “a broad set of players” that are competing for WLAN business, as customers shift to AI and cloud-driven strategies. Indeed, the European Commission found that HPE/Juniper would “continue to face competition from a wide range of competitors, including strong and established players on each of the markets.”
Even accepting the DOJ’s market definition, Cisco would remain the largest player post-merger and the merged firm would be positioned to intensify beneficial competition with Cisco. As an industry analyst explains, if “DOJ blocks the HPE-Juniper deal, Cisco stands to gain the most.” If the merger goes forward, however, there would likely be increased pressure on all players to innovate and offer better value.
The DOJ is silent about the “remaining 30%” of the market. As John Yun puts it, “nearly 67% of sales [would] occur outside of a combined HPE-Juniper.”
The Case for Beneficial Efficiencies
The DOJ’s narrow focus also risks missing substantial efficiency gains that could accrue to consumers and the broader economy. Combining HPE’s extensive enterprise reach and complementary product portfolio with Juniper’s cutting-edge, AI-powered Mist platform holds immense promise. This synergy is not merely about eliminating redundancies, but about forging a more integrated and sophisticated product offering.
Such a combination could streamline product development, accelerate the deployment of advanced networking solutions, and yield significant cost savings that could be passed on to customers through more competitive pricing or reinvestment in research and development. These are precisely the merger-specific efficiencies—creating a formidable force for innovation—that procompetitive merger analysis should recognize.
The Global Dimension
The global competitive landscape, particularly the rise of foreign competitors like Huawei, adds another layer of strategic importance to this merger. When considering the broader enterprise networking market, which includes a diverse array of global players, a combined HPE-Juniper likely would create another robust and credible American firm.
In an increasingly interconnected and competitive global economy, enhancing American competitiveness in key high-tech sectors is paramount. A stronger and more innovative HPE/Juniper entity would be better positioned to compete globally, not just domestically, thereby bolstering the United States’ strategic advantage in critical digital infrastructure.
Fostering highly competitive domestic firms capable of driving technological advances and economic growth is particularly significant against a backdrop of intensifying international rivalry. Dismissing these potential gains risks unintended negative consequences for American leadership in a sector vital to national security and prosperity.
The DOJ Should Consider Withdrawing Its Complaint
Applying narrow and economically dated approaches to merger analysis risks stifling the very innovation and economic growth that America needs. The DOJ may wish to seriously weigh the European Commission’s pragmatic stance in this case, based on a sophisticated assessment of competition in a dynamic and evolving high-tech market.
Continuation of the DOJ case against the HPE/Juniper merger omits consideration of key economic realities. This merger promises not only significant efficiencies and product enhancements, but also the creation of a stronger American competitor poised to challenge market leader Cisco and contend more effectively in the global high-tech arena.
A nuanced approach that prioritizes enhanced American competitiveness and innovation—rather than an outdated and simplistic focus centered on the number of market players—is essential for continued economic vitality in this critically important sector.
More generally, the Trump administration’s commitment to a so-called “America First” agenda would be promoted by supporting mergers that enhance the global competitive strength of American firms in key high-tech sectors without diminishing domestic competition. Opposing such mergers would seem to be at odds with that agenda.
An interim Antitrust Division head approved the HPE-Juniper challenge a mere 10 days after the January presidential inauguration. Now that they have assumed their posts, Attorney General Pam Bondi and Assistant Attorney General for Antitrust Gail Slater may want to consider these factors carefully in refining DOJ merger policy. (Federal Trade Commission Chairman Andrew Ferguson may also wish to take note.)
Such considerations may warrant dropping the merger challenge to the HPE/Juniper merger prior to the July 9 trial date.
