Juniper CEO: 'I am disappointed and somewhat puzzled' by DOJ merger rejection

HPE and Juniper met with the DOJ several times to go over the purchase, but the companies had no inclination the DOJ would go the direction it did—certainly with regards to its focus on the wireless market, Rahim said.

The DOJ issued a Complaint “that ignores the reality that HPE and Juniper are two of at least ten competitors with comparable offerings and capabilities fighting to win customers every day,” the companies wrote. “A Complaint whose description of competitive dynamics in the wireless local area networking (WLAN) space is divorced from reality; and a Complaint that contradicts the conclusions reached by antitrust regulators around the world that have unconditionally cleared the transaction.”

“As part of this process, the DOJ requests large volumes of information, documents, and so forth, which we have worked very constructively with them, including meetings that I myself participated in. But no, now, at this point, we’re just preparing to go to court,” Rahim said. 

“The DOJ Complaint ignores both the extensive benefits that will result from the proposed acquisition and the nature and extent of competition in the wireless networking space,” the companies continued. “It is a Complaint that will reinforce the status quo by benefiting Cisco, which has dominated wireless networking for decades (and whose dominance was threatened by the acquisition); a Complaint that will hobble competition with Huawei—which has been repeatedly identified as a national security risk by the U.S. government—and thus damage the U.S.’s stated aim of reducing the use of Chinese technology in critical infrastructure globally,” the companies wrote in response to the court.

“If the government’s lawsuit were to succeed, 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,” the companies wrote.

Industry analysts question DOJ’s WLAN argument

Many industry watchers might have thought the higher end of the networking spectrum—say, large enterprise switches, routers, and other gear—would be a potential competitive issue for the DOJ. Concern about WLAN competition was not expected.