The settlement aimed to restore competition by ensuring that key assets, such as HPE’s Instant On business and Juniper’s AI Ops for Mist source code, remained available to competitors. The divestiture of the Instant On business to a DOJ-approved buyer within 180 days and the licensing of Mist AI software were designed to maintain competitive dynamics in the wireless local area network (WLAN) market, preventing the merged entity from dominating over 70% of the market alongside Cisco Systems. Industry perspectives, including comments from solution providers, suggest that these measures were seen as minor concessions that preserved the deal’s benefits while fostering competition, particularly against Cisco, by enabling a stronger, AI-driven networking portfolio for HPE.

To be sure, the effectiveness of these measures in fully restoring competition depends on the execution of the divestitures and licensing, as smaller competitors may still face challenges matching the scale of the merged HPE-Juniper or Cisco. That said, the licensing Juniper’s Mist AI software source code to independent competitors is a notable concession in the DOJ’s settlement with HPE and Juniper. This move was designed to facilitate new entry and maintain competition in the wireless local area network (WLAN) market.

The Mist AI software is a key component of Juniper’s portfolio, powering its cloud-managed, AI-driven networking solutions that optimize wireless performance and user experience. By requiring HPE to license this source code to competitors, the DOJ aimed to lower barriers for new or smaller players to develop competitive WLAN solutions, potentially fostering innovation and preventing the merged HPE-Juniper entity (with over 70% market share alongside Cisco) from stifling competition. This licensing could theoretically enable entrants to build or enhance AI-driven networking products without the need to develop comparable technology from scratch—a significant hurdle given the complexity and cost of AI-driven network management systems.

The effectiveness hinges on how accessible and affordable the licensing terms are in the future so the DOJ’s oversight will be very important. New entrants will likely need more that just access to the source code, they will need the technical expertise, infrastructure, and market reach to capitalize on the code. The settlement also required HPE to divest its Instant On wireless business to a DOJ-approved buyer within 180 days. This divestiture ensures that a standalone competitor retains a foothold in the market, potentially amplifying the competitive impact of the Mist AI licensing by giving an existing player immediate market presence. Fortunately, many of the competitors in the WLAN enterprise grade are actually significant competitors already.

This is clearly a strategic compromise that preserves HPE’s ability to compete with Cisco and globally while addressing DOJ concerns in the domestic market. The licensing of Mist AI could indeed spur innovation by enabling competitors to offer AI-driven solutions, potentially leading to new entrants or strengthening existing ones like Extreme Networks, Arista, Fortinet, or Ruckus. In short, giving up the Mist AI source code is a significant concession in that it creates an opportunity for new entry by lowering a key technological barrier. Whether it truly restores competition depends on how competitors leverage this access and navigate the broader market challenges. It’s a step toward leveling the playing field, but not a guaranteed win for new entrants against the industry’s heavyweights.

Lessons Learned

The recent settlement in the HPE-Juniper merger case offers insights into the DOJ’s approach to antitrust enforcement. Although the allegations in the complaint lacked a clear resolution, the settlement reflects a pragmatic decision by the DOJ to accept an imperfect remedy for a case with weak grounds for a full challenge.  The DOJ hailed the settlement as a victory, describing it as a novel approach to addressing unique challenges in merger cases. Notably, the DOJ considered the procompetitive benefits of the merger, particularly in the context of global competition. The agreed-upon remedy includes HPE’s divestiture of its global Instant On campus and branch WLAN business and at least one perpetual, non-exclusive license to Juniper’s Mist source code. This remedy modestly reduces market share in the enterprise-grade WLAN solutions market, but allows for new entrants to expand their enterprise grade WLAN offerings.  In addition, the divestiture and licensing must be completed within 180 days, with the possibility of 60-day extensions if needed, indicating the DOJ’s flexibility in finalizing the agreement.  This is also a departure from recent practice.  

Assistant Attorney General Slater’s stance against accepting inadequate remedies may still hold when a challenge is strongly supported by evidence. However, in this case, she demonstrated willingness to negotiate a less-than-ideal remedy for a merger that likely did not warrant being blocked. This decision aligns with the investigating staff’s view that the deal should not have been challenged initially.  The decision to settle rather than litigate, despite a weak legal case due to Juniper’s modest 6.5% market share, reflects a strategic choice to preserve agency credibility while enabling the merger and also aligns with the Trump administration’s “America First” agenda.

The key takeaways are that the DOJ is open to settling weaker cases with tailored remedies; the DOJ will consider procompetitive benefits, such as global market competitiveness so that can influence outcomes in future deals; and the DOJ is willing to use flexible timelines and pragmatic remedies reflecting a balanced approach to antitrust enforcement.    

Andre Barlow

202-589-1838

Under the Biden administration, U.S. antitrust agencies, particularly the Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC), took a hardline stance against negotiated merger remedies. Instead of settling, they often challenged mergers outright or allowed deals to close without formal conditions, expressing doubts about the effectiveness of remedies like structural divestments.

The Trump administration, however, signals a return to a more business-friendly approach, favoring settlement agreements with divestiture remedies to resolve anticompetitive concerns without litigation. Recent weeks have seen the clearance of five major transactions, each with tailored remedies, highlighting this shift.

Recent Examples of Merger Remedies

1. HPE/Juniper: Rather than litigate, the DOJ entered into a settlement agreement with HPE that required it to divest its Instant On wireless networking business and license Juniper’s Mist AI software.
2. Synopsys/Ansys: The FTC required Synopsys and Ansys to divest assets to Keysight Technologies to address concerns in software tools markets critical for semiconductor design and light simulation devices. This “mix-and-match” remedy involves assets from both parties.
3. Keysight/Spirent: The DOJ mandated Keysight to divest Spirent’s high-speed ethernet testing, network security testing, and RF channel emulation businesses to Viavi, addressing competition concerns in specialized communications test equipment markets.
4. Safran/Collins: To resolve DOJ concerns, Safran must sell its North American actuation business to Woodward, preventing higher prices, reduced quality, and stifled innovation in actuation and flight control markets.
5. Alimentation Couche-Tard (ACT)/Giant Eagle: The FTC required ACT to divest 35 gas stations to Majors Management to mitigate higher fuel costs in certain U.S. states. ACT must also notify the FTC before acquiring “competitively significant” stations in affected areas for ten years.
6. Omnicom/IPG: Unlike the structural divestments above, this global advertising deal involved behavioral remedies. The FTC imposed provisions to prevent Omnicom from directing advertising away from media publishers based on political or ideological viewpoints, a rare but market-specific solution.

Common Themes in Recent Remedies

• Upfront Buyers: In most of the structural divestiture cases, the parties were required to produce an upfront buyer to ensure remedy effectiveness, a standard U.S. agency practice.
• Innovation Concerns: In Synopsys/Ansys, Keysight/Spirent, and Safran/Collins, agencies cited potential reductions in innovation alongside price increases, reflecting a growing focus on innovation as a competition parameter.
• Global Coordination: These cases involved cooperation with international authorities (e.g., EU, UK, Japan, South Korea), aligning remedies and timing. For instance, the UK’s Competition and Markets Authority approved remedies in Safran/Collins on the same day as the DOJ.

FTC Leadership on Remedies

FTC head Andrew Ferguson has championed negotiated settlements, arguing they preserve procompetitive merger benefits while addressing anticompetitive concerns. Settlements are cost-effective, leveraging agencies’ limited resources and avoiding complex litigation where parties might propose remedies in court (“litigating the fix”). However, Ferguson cautions against inadequate or unworkable settlements, particularly behavioral remedies, and emphasizes the need for rigorous standards. The FTC plans to release a detailed policy statement on merger remedies soon.

Lessons Learned

The Trump administration’s antitrust agencies are now open to negotiating settlement agreements that fully resolve anticompetitive concerns, a practice welcomed by businesses and enforcement agencies alike. Companies pursuing mergers should proactively propose robust remedies early, clearly articulating procompetitive benefits like innovation, growth, and investment to align with this more collaborative enforcement approach.

Andre Barlow

Facing a tight deadline before Slater’s confirmation, the DOJ filed suit to block the deal arguing it would harm competition in the enterprise-grade wireless local area network (WLAN) market.  While the DOJ’s intent to protect customers is a worthy goal, its case rests on a flawed premise, resting on a narrow view of the market that ignores robust competition and the broader strategic imperatives at play. Far from stifling innovation or choice, this acquisition would strengthen a key American player to rival Cisco domestically and, critically, counter Huawei globally.  For those reasons, DOJ’s litigation stance should be reconsidered.

Flawed Antitrust Concerns

The DOJ’s claim that the merger would overly concentrate the enterprise-grade WLAN market misreads the competitive landscape. The complaint paints HPE and Juniper as the second- and third-largest players behind market leader, Cisco, alleging their combination would leave just two firms controlling over 70% of enterprise-grade WLAN solutions. This analysis oversimplifies the competitive dynamics of the industry.

First, the European Commission and the UK’s Competition and Markets Authority, which both cleared the merger in 2024 after determining it posed no realistic threat to competition, confirm that the transaction does not raise competition concerns. In addition, the Biden Administration could have sued to block the merger but chose not to do so.

Second, the product market definition alleged by the DOJ is much too narrow.  Even the UK’s CMA did not find any functional or technical differences between WLAN products sold to large or smaller enterprises.

Third, the WLAN market is not a cozy oligopoly but a battleground where multiple players are vying for share. Cisco is more than twice as large as a combined HPE-Juniper with over 50% share for the past ten years.  Indeed, Juniper’s share is in the single digits and the combined firm’s share is less than 25%.  Companies like Extreme Networks, Arista, Fortinet, CommScope, and Ubiquiti, which make up approximately 25-30% of the DOJ’s narrowly defined market, have the technological muscle to reposition themselves, scale, expand, and rapidly grow share. Extreme Networks, for instance, powers WLAN for major enterprises like Kroger and universities, delivering secure, high-performance networks that rival those of HPE and Juniper. These firms are well-capitalized with proven deployments and R&D pipelines poised to exploit any opportunity. If HPE-Juniper raises prices or slacks on innovation, these competitors are ready to provide real choice to large enterprises including hospitals, campuses, and retailers.

Fourth, the DOJ’s focus on market share also ignores how enterprise WLAN works in practice. Large customers routinely solicit bids from multiple vendors, pitting solutions against one another in competitive request for proposals. This process keeps pricing in check and forces innovation, regardless of who merges with whom.  Juniper’s Mist platform and HPE’s Aruba have indeed competed head-to-head, but so have they with Cisco, Extreme, and others.

Fifth, the DOJ’s complaint includes a litany of inflammatory quotes from HPE’s executives’ documents, but not one deal document was cited. Notwithstanding their provocative nature, these statements have little grounding in the reality of competition.  Documents only matter if they are reliably predictive and relevant. The selective quoting of internal documents may suggest head-to-head competition, but any suggestion that the documents demonstrate that the merger would harm competition contradicts reality.  In reality, customers of HPE and Juniper may choose between the two companies as well as an entire host of alternatives including Cisco, Extreme Networks, Fortinet, and Arista.  The idea that merging HPE and Juniper would suddenly let them dictate terms overlooks the technological strength of the competitors and the bidding process. If anything, combining HPE’s scale with Juniper’s AI-driven tools could drive sharper pricing and faster feature rollouts to fend off these hungry rivals.

Finally, the DOJ is challenging this acquisition in the same district court where it lost its challenge to Oracle’s acquisition of Peoplesoft in 2014 because evidence that Oracle and PeopleSoft competed aggressively against each other was not enough to prove anticompetitive effects and that they competed in a three firm market was too narrow.

National Security and Global Competitiveness

The DOJ’s case overlooks the significant national security stakes involved in this merger. Huawei, the Chinese tech giant banned in the United States over espionage concerns since 2019, continues to dominate global telecom infrastructure markets with state-backed pricing strategies. HPE CEO Antonio Neri has framed this acquisition as essential to creating a robust U.S.-based alternative to Huawei.  A stronger HPE-Juniper would create a number-two player with the muscle to challenge Cisco at home while taking the fight to Huawei in global markets. The deal would create a “full stack” U.S. alternative to Huawei, combining HPE’s servers, storage, and Aruba networking with Juniper’s AI-native routing and telco expertise.  Integrating AI, security, and networking is a procompetitive move that bolsters national security by offering a robust Western option for global telcos and enterprises in AI driven and 6G markets. Without this deal, the U.S. risks ceding ground to Huawei, especially in emerging markets where 6G and IoT are reshaping connectivity.  Moreover, HPE and Juniper power critical U.S. infrastructure by supporting the Department of Defense and Department of Energy making the combination a matter of “core tech” that strengthens America’s technological sovereignty.

Unlocking Innovation

HPE and Juniper bring complementary strengths that could unlock significant efficiencies post-merger. HPE’s expertise in cloud computing and hybrid IT solutions pairs seamlessly with Juniper’s AI-native networking tools. Together, they could deliver unified platforms that simplify IT management for enterprises while accelerating advancements in AI-driven infrastructure. These aren’t abstract savings; they’re the kind of edge U.S. firms need to outpace Huawei’s one-stop-shop model.

A Call for Reevaluation

Blocking this merger risks weakening a U.S.-based champion at a time when global tech leadership and national security are at stake.  Slater should use her fresh perspective to reevaluate this litigation with an eye toward getting the antitrust analysis right and balancing competition policy with broader strategic imperatives. Blocking HPE’s acquisition of Juniper Networks is counterproductive because it risks reinforcing Cisco’s dominance, undermining U.S. competitiveness against global rivals, and stifling innovation. Slater should reconsider the DOJ’s litigation decision to ensure that antitrust enforcement facilitates not hinders the ingenuity of American companies.  Importantly, the acquisition does not substantially lessen competition because Extreme Networks and others are ready to fill any void for those customers looking for another source of enterprise grade WLAN products.  In conclusion, the DOJ should let this deal proceed for the sake of innovation, competition, and national security.

Andre Barlow

202-589-1838