Antitrust

Trump federal antitrust enforcers have come out of the gate hot. Within the first month of Trump’s second administration, the DOJ has sued to block Hewlett Packard Enterprise’s (HPE) $14 billion acquisition of Juniper Networks (Juniper), a transaction that was unconditionally cleared in the UK and European Union on seemingly similar facts. The DOJ and FTC have also confirmed that the joint Merger Guidelines adopted in December 2023 under former FTC Chair Lina Khan and Assistant Attorney General Jonathan Kanter will remain in place. These actions could be an early sign of greater consistency in antitrust enforcement across the two presidential administrations.

DOJ’s Challenge of HPE-Juniper

HPE announced on January 9, 2024, that it had agreed to acquire Juniper. Over a year later, on January 30, 2025, the DOJ sued in the Northern District of California to block the transaction. Both companies are providers of enterprise-grade Wireless Local Area Network (WLAN) solutions, which are a collection of technologies that allow enterprise customers to connect to computer networks and the internet. The complaint cites the 2023 Merger Guidelines and alleges that the acquisition would lead to a presumptively unlawful degree of concentration by consolidating the second- and third-largest providers of enterprise WLAN solutions in the United States, leading to the top two WLAN providers post-acquisition accounting for well over 70% of the market.

In addition to increased market concentration, the DOJ alleges that the transaction would eliminate “fierce” head-to-head competition, “weaken innovation,” and facilitate coordination among the remaining WLAN providers.

The DOJ’s complaint describes several bid opportunities where HPE and Juniper were reportedly the top two bidders, and where HPE allegedly offered deep discounts to compete with Juniper’s low prices. The DOJ also relies on HPE documents to claim that HPE invested in product innovations to compete with Juniper. The DOJ further claims that the two leading providers post-transaction, Cisco and a combined HPE-Juniper, could more easily coordinate on price and product features, with smaller enterprise WLAN providers following suit.

The Parties’ Response

In their answers to the lawsuit, HPE and Juniper argue that the DOJ has mischaracterized the WLAN market and ignored the acquisition’s potential to enhance competition and benefit customers. HPE states that DOJ’s complaint has engaged in a “sleight of hand” by focusing on an allegedly high market share for Cisco, HPE, and Juniper combined, while being “conspicuously silent” that the Parties’ combined market share would be less than 25%, far below the concentration levels that typically receive antitrust scrutiny. HPE emphasizes that it faces intense competition from several well-established and credible providers of enterprise-grade WLAN services. According to HPE, acquiring Juniper would allow it to achieve the requisite scale and breadth to provide a more comprehensive package of services that would benefit customers. However, if the DOJ succeeds in challenging the acquisition, HPE claims that “the true beneficiary would not be the customers, who will lose the benefits of a combined company, but Cisco, which will continue to have the scale needed to preserve its controlling share.” 

Juniper’s answer similarly portrays the acquisition as pro-competitive, stating that “[t]he combined company will provide customers with innovative solutions across the entire networking stack to better meet competition from a growing number of alternative providers.” And Juniper avers that “the transaction will stimulate competition for WLAN solutions with Cisco, a decades-long entrenched incumbent.”

Conflicting outcomes in the U.S. versus the EU and UK

The Parties’ view of the transaction may find support from grants of unconditional clearance during Phase I reviews by the European Commission (EC) and UK Competition and Markets Authority (CMA) in August 2024. Interestingly, the EC and CMA clearances appear to have been based on similar facts and market dynamics as existing in the United States. Indeed, the EC concluded that the transaction was unlikely to pose anticompetitive effects even in a worldwide market for WLAN equipment. 

In their clearance decisions, both the EC and CMA pointed to the strong competition the Parties would continue to face from Cisco and numerous other competitors. Both regulators found that the transaction would increase HPE’s market share by a limited amount (5-10%) and HPE’s share of the WLAN equipment market would remain relatively low (20-30%). The Parties’ WLAN offerings were also considered sufficiently differentiated such that they were not close competitors. 

The conflicting conclusions between the DOJ and the EC and CMA reflect the enforcers’ differing perspective on the Parties’ WLAN market competitors. The DOJ characterizes the WLAN market as dominated by three primary competitors, Cisco, HPE, and Juniper, with a “significant gap” before reaching the remaining “distant competitors.” According to the DOJ, the high degree of market concentration between Cisco and a combined HPE-Juniper would enhance the risk of coordinated interaction. The EC and CMA, on the other hand, found that the combined company would face significant competitive pressure from other WLAN providers. These providers were found to offer services of comparable scale and functionality as the merging Parties and would constrain, rather than coordinate with, a combined HPE-Juniper.

Implications for future U.S. antitrust enforcement

While some speculated a lowering of the temperature in antitrust scrutiny under President Trump, the DOJ’s challenge to HPE-Juniper suggests caution is warranted.

Further, on February 18, 2025, the DOJ and FTC announced their joint commitment to maintaining the 2023 Merger Guidelines developed under the Biden administration. Newly-appointed FTC Chairman Andrew Ferguson explained that by maintaining the 2023 Guidelines, the new administration is creating predictability, stability, and saving limited government resources. While Ferguson left the door open to possible targeted revisions, he noted that the “wholesale rescission and reworking of guidelines is time consuming and expensive” and should only be undertaken “sparingly.” During the Senate confirmation hearing of Gail Slater, nominated by Trump to lead the Antitrust Division of the DOJ, and in the formal responses submitted by Slater to the Senate Judiciary Committee, Slater noted that she agreed with Ferguson and stated that, if confirmed, her approach for merger review for the DOJ will be to “follow the legal and economic framework described in the 2023 Merger Guidelines.”

Importantly, however, Slater has expressed a greater willingness to consider remedies—particularly divestitures—compared to the prior administration. Former DOJ AAG Jonathan Kanter was outspoken in his opposition to accepting remedies to address transactions that raised competitive concerns, believing that, in most cases, the DOJ should sue to block the transaction outright. In Slater’s responses to the Senate Judiciary Committee, she stated that the DOJ under her leadership would be “more open to settlements in merger cases when effective and robust structural remedies can be implemented without excessively burdening the Antitrust Division’s resources.”

It is still early days in the Trump II administration. Future federal antitrust enforcement actions, and the degree to which they embrace the presumptions and theories of harm in the 2023 Merger Guidelines, will confirm whether the new administration will trend towards a more business-friendly approach to mergers and acquisitions or consistency with the prior administration.

In the HPE/Juniper merger litigation, the DOJ has proposed a trial schedule beginning September 8, 2025.